Tax Planning for Entrepreneurs

This week, Maggie sits down with Keila Hill-Trawick, Founder and Principal of Little Fish Accounting, to talk about tax planning for business owners.

Are you a small business owner? Then this podcast episode is for you! Learn everything you need to know about paying taxes as an entrepreneur and what you should ask when hiring a tax professional.

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Keila Hill-Trawick is the Founder + Principal of Little Fish Accounting, a boutique CPA firm dedicated to the accounting and tax needs of individuals, freelancers, and small business owners. Keila holds a Bachelors of Business Administration in Accounting from Georgia State University, an MBA from Mercer University. Keila hails from Atlanta, GA and is currently based in Washington DC.

To learn more about Maggie and her coaching and speaking services, visit

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The theme music is called Escaping Light by Aaron Sprinkle. The podcast artwork design is by Maggie’s dear husband, Dan Rader.


Maggie G (00:00): Hey there and welcome to the money circle podcast. My name is Maggie Germano and I am your host. This week I sat down with Keila Hill-Trawick who is the founder and principal of little fish accounting, a boutique CPA firm dedicated to the accounting and tax needs of individuals, freelancers and small business owners. Keila holds a bachelor’s of business administration and accounting from Georgia state university and an MBA from Mercer university. Keila hails from Atlanta, Georgia and is currently based in Washington, DC. Keila and I talked about everything you could really think of when it comes to being an entrepreneur and having to make sure you’re paying your taxes and organizing your expenses properly. So, uh, as a business owner myself, this is a topic that I think about a lot and that I feel very strongly about because it’s something that I haven’t always felt very confident about and still really don’t. And so I know that there are plenty of other self-employed folks out there that feel probably the same way. So getting as much information and education as possible is a great way to help businesses succeed. And then also connecting small business owners with awesome people like Keila and her firm is a great way to help people’s businesses flourish and grow. So I hope that you enjoy the conversation, whether you are a business owner or not and uh, let us know what you think.

Maggie G (01:49): Welcome Keila. Thanks so much for being here today.

Keila H-T (01:53): no problem. Thank you for having me.

Maggie G (01:55): Yeah, of course. Um, so tell us a little bit about who you are and the work that you do.

Keila H-T (02:01): So I am Keila Hill-Trawick. I run a company called little fish accounting, which is a boutique CPA firm where we focus on accounting, taxes, bookkeeping, financial statements, all for what I call really tiny companies, which means, um, most of our clients and potential clients are, you know, solopreneurs, one or two person LLCs, partnerships. So really just small companies who would not otherwise have an accounting department.

Maggie G (02:30): Hmm. Yeah. Say a little bit more about that. What, why do you focus on those small companies or those solo printers and what might prevent them from getting the support they need? Otherwise?

Keila H-T (02:43): I noticed a couple of things. One was that I had a lot of friends and knew a lot of people who run businesses and maybe had a tax prepare, maybe not, but didn’t have an accountant to talk to, talk to throughout the year. And so what would happen is by the time they would come bring me all of their stuff for their taxes, I’d be like, this is great. Let me tell you all the things that you can do next year because I can’t recreate what you didn’t do last year. And so really just wanting to be a resource throughout the year so that people were able to take advantage of the opportunities that the IRS presents to them. Um, but then also I found that a lot of the larger accounting and CPA firms could be a little, um, condescending. They don’t do a lot of handholding. There was a lot of processing of like, okay, here are your financial statements or here are the reports you asked for. Let us know if you have any questions. And having that distinct realization that, well, people don’t know what to ask if you don’t tell them. So kind of both wanting to be a resource throughout the year, but also wanting to people to understand that like there’s some stuff that you can do and some things that you need help on, but you shouldn’t be at the mercy of someone else without having some understanding of what your books are doing,

Maggie G (04:00): right. Because you don’t know what you don’t know. Especially if you’re new into having a small business and you don’t really know what you’re doing, you don’t know to ask the right questions. So you could be still confused or missing out on things,

Keila H-T (04:16): right? And there’s a lot of, uh, information on the internet about what you should do when you start a business and why you should do it that way without a lot of understanding behind it of why. And so people will just kind of go online, which we all do. We all try to Google what we can, but you need at least some guidance to say, go in this direction. Maybe you can look up some information that will support this under the understanding of what you’re doing, but you’re not starting from scratch by yourself.

Maggie G (04:47): Right. Cause yeah, I know I’ve done the same kind of thing where I was just getting started with my business and I would Google like how do you pay taxes or what do I write off? And there’s just so much information out there that can make it really overwhelming and scary. And it also can make it hard to just know what actually applies to you. So having someone who understands your individual circumstances that also understands Texas and bookkeeping and all of that can be really helpful.

Keila H-T (05:17): Very true. And I think there’s a lot of information out there that is what I called true. True. Because you didn’t get caught. So it’s not necessarily really the right way to do it, but the IRS may not have the resources to actually audit you to find that information. And so people make it seem like it’s the right way when really it’s just maybe a less risky way. But if you do get caught, you’re going to get penalized.

Maggie G (05:43): Yeah. For sure. And I know that I personally had a slight audit this year. Um, I also had a whole lot of complicated things going on last year, like at married at the end of the year. But I’d been on marketplace insurance for the year before that and we ended up having to pay all of that back, which was very painful and unfortunate. And it’s not a fun time. No, I was like, why? I should have just gone on his insurance to begin with. But I thought that I would save money this way because I wasn’t earning a ton and we weren’t married yet, but that didn’t work out.

Keila H-T (06:20): That happens throughout the year that people don’t realize are taxable events. And so when you’re thinking about things like insurance or you know, your 401k or something like that, when you’re making these life decisions, there’s not an automatic correlation to say, but now there’s going to be a tech impact to this. And so to your point, you make the decision that seems to make sense in your life. Like, okay, we have insurance, I’m paying for it, it’s cheaper, we’re good. Why would the average lay person think, but also there’s going to be a taxable event associated with this that I need to be prepared for. So, I mean, it happens a lot unfortunately.

Maggie G (06:55): Yeah. It was definitely not something I was expecting and I hadn’t been working with a an accountant or a tax expert when I did make that decision to go on the marketplace and all of that. And I wish that I could have, you know, gone back and asked someone’s advice first and made a different decision because instead of getting a refund, we had to pay a whole lot of money back. But you know, it happens and now I know exactly. And this year will be a lot less painful I think because we’re just in a different circumstance. Um, yeah. So, um, how did you find yourself in this line of work? Not only in the tax side of things, but also as a small business owner yourself?

Keila H-T (07:39): Yeah, I mean, I didn’t start off that way. The plan was not to have my own business. I definitely kind of started doing this on the side, like a lot of people just kind of thinking through, Hey, what other services can I offer to the world that can make a little bit extra? Um, but I realized a couple of things. One, I like this work better than I liked my full time work. Um, I could see my impact more directly in a way that I couldn’t when I was working for the government. You know, you get really siloed and it’s like this is what you do. You do that every day and you get good at it. But I started wondering why do I care about that? Do I care whether or not somebody signed off on this form or whatever. The thing was, I want to do a good job, but I don’t see how this matters in the big scheme of things.

Keila H-T (08:28): And so I kind of started doing this more and more. I started honestly getting inspired by my clients. Like, wait, you can make a living doing that for yourself. I just always assumed that I would be working for somebody. And now that I see that there’s a road that I can take where I could work for myself, um, provide my skills in service to people and also pay my bills, eat, you know, take myself on trips. It kind of came together in that way. That allowed me to be able to say, Oh, okay, well I think I’m going to quit my job. But I was working as an accountant probably for the past 15 years in corporate and in government. Um, in various ways. I actually tried to get out of accounting and several times life kept bringing me back to it and eventually I realized that I did not like accounting.

Keila H-T (09:19): I just didn’t like how I was using it. I liked the numbers. I like the analysis. I like all of that kind of stuff. I just don’t very much care whether or not this rolls up several layers of hierarchy to get to somebody when the people there didn’t seem to care either. So then I figured, well if I do it for individuals, I see an immediate impact. I know that I’m making a difference and I get immediate feedback about like, what do you need? What do you need help on? What can I actually help with and what do I need outsource. And so little fish was kind of born of that. And then I left my full time job early in 2019 and I’ve kinda been doing this ever since.

Maggie G (10:00): Yeah. That’s so awesome. And I totally relate to what you were saying about wanting to feel that impact, that immediate impact and seeing how you’re actually helping people rather than feeling like you’re doing work for someone else or for some greater bureaucracy that you can’t really see and that isn’t really giving you a lot of feedback or making you feel that impact. So I definitely relate to that and that’s really how I ended up finding my own way to entrepreneurship. Um, and so where does the name little fish come from?

Keila H-T (10:35): I mean, it was kind of a play on like little fish in a big sea. Um, this idea that there are so many small bins is actually really funny because when I started little fish, because a lot of my work was local, I thought I was going to run out of clients. I was like, I’m going to touch everybody eventually and then there won’t be people that need me. But there are so many, I mean millions get started every day. Um, but those are the people that often get left out. People who just kind of are like, Hey, I can bake. I’m going to start baking things and selling them and they’re not thinking about building a business and what comes with that and all of the pieces that have to go with like registering your business and paying taxes on it. They’re just like, I have a skill that I could get paid for. And so that was kind of my aim in was like, if I’m going to do this, I want to do this for not just small businesses but really small businesses. Not people who are small but like have a team of 50 as opposed to 10,000. But like I’m doing this for myself and maybe I have friends helping me. Maybe I’ve got a couple of contractors on staff, but it’s a real business that doesn’t have a whole lot of head count behind it.

Maggie G (11:49): Yeah, that makes sense to me. And like you were saying, those are the people that need that kind of support that maybe don’t have the manpower or the money in terms of resources to hire a bigger firm or get support from somebody else, but they would be looking for someone like you. Um, so what are the first couple of steps that people, if they are wanting to start a business or just to, you know, dip their toe into entrepreneurial-ism, what are the first couple of steps they need to take to make sure that they’re on the right track financially and tax wise and all of that?

Keila H-T (12:25): I would say the very, very first step that I tell everyone is to track everything. I think a lot of people think, well, I’m not really sure if this is going to go anywhere or do anything. So I’m just kind of trying to get out. But you’re going to have expenses. You may even have income at the beginning. Make sure you’re tracking that so you see where the money is going, not just from an accounting standpoint. Obviously it’s important for taxes, for financial statements, stuff like that. But really from a strategic business standpoint, I tell people all the time, like, how do you know what’s working? Um, wanting to, examples that I give a lot are Instagram and Facebook ads because they’re so cheap. Um, people are like, I’m just gonna pay for them. But then I think, okay, so if you pay for a bunch of Facebook ads in August, did you see income go up in September?

Keila H-T (13:10): I did you check that? Because if you didn’t, yeah, it was cheap. But it’s money that may not be strategically spent. So kind of paying attention to what you’re spending on, um, pay attention to what people are asking for. One of the things that happens a lot for especially minorities, especially women, is that we underprice ourselves. And part of that is this idea of like I can do it and it doesn’t take that long. So maybe it shouldn’t cost that much. But part of it is also this feeling of, but you are doing a service that provides value and if you’re going to do that, um, it should cost and if it’s going to cost, what do people want him to do for them? Because I think one of the things that people kind of underestimate is this feeling of people are gonna want to pay you for things.

Keila H-T (14:02): And so what are those items so that you can build them into your business and then charge accordingly only for them. Um, so that’s one of the main reasons that I say track because one, you can see what’s working and what’s not. Until two, you can build scalability but also just build like what do you want this business to look like? People are, you know, asking you for things. Is that what you actually want to do for work? Um, the second thing that I would say is start looking at your business entity type. Are you going to have a partner in this? Are you going to do it by yourself? Is this going to be your sole, um, stream of income or is it going to be on the side that may determine whether or not you want to be treated as an LLC or not. So looking into what would go in to the state building of it, but also what is required of you to keep that hearing on. Again, that’s going to obviously affect how your attacks, but it also kind of tells you what things you need to register for on the front end with a lawyer that doesn’t even get you to when I can’t meet yet.

Maggie G (15:03): Hmm. Yeah, that’s really helpful cause I think that that’s something people don’t always think about where it is, you know, what is that business entity going to look like and kind of thinking down the line and in the future of what you might want the business to look like and how you want it to function. Is there any particular entity that is better in terms of like tax liabilities?

Keila H-T (15:27): it depends on your situation. One of the things that I will say is that a lot of people will run to an LLC thinking that it’s going to save them from taxes and it generally doesn’t. So when Jim, I will tell you here is that an LLC is really for liability protection from an IRS standpoint. They don’t even recognize an LLC. So there are people who will come to me as sole proprietors and they’re like, I have an LLC because I heard that it would save me on taxes. I’m like, the IRS is going to tax you exactly the same way whether you had an LLC or not. Um, from a state standpoint, sometimes the LLC can cost you because um, you may pay a higher tax rate because you’re an unincorporated business. Um, I know for DC specifically, you have to pay to keep your LLC up every couple of years, which is a couple hundred dollars and that may or may not be necessary for your business. So more so kind of which is better, I would say figure out what you want from your business entities. You can sign up for the one that best works for your business as opposed to kind of the internet telling everyone have an LLC all the time without you knowing what the impact is going to be for your business.

Maggie G (16:36): Hmm. Yeah, that’s really helpful and not really something I’ve thought about before cause I, I’m an LLC with my business and I, I didn’t think that that would save me in terms of taxes. I thought that that would protect me more like separating me as a one individual human versus my business in case something were to happen if someone tried to Sue me or something like that. If I were to find out that I was getting taxed higher in Maryland for being an LLC versus something else. Do you know if there’s a way to kind of re, uh, categorize my business or is that something that would be more difficult?

Keila H-T (17:13): It’s something to think about. Like how much higher are they taxing you? Is it such a small percentage that the liability protection is still worth it? Um, the other thing that think about is whether or not having that registration benefits you in other ways. Maybe that’s grants, maybe that’s other things that you want to apply for later down the line. And having that LLC put you in a position to take advantage of those things. Um, so it’s really kind of a cost benefit analysis. Some stuff you’re like, I mean LOL, little fishes and LLC too. And so there are times where I’m like, ah, I’m paying more for this. And to your point, the liability protection has its own items. Making sure that you’re keeping everything separate at all times so that you don’t Pierce the veil of saying, yeah, I call it analyse, but it’s not really separate.

Keila H-T (18:01): Um, those types of things. So I don’t necessarily think it’s a bad thing. Obviously the, I’m walking down that same path. Um, but it’s something to start looking at, especially for people who are starting businesses in advance of like, to your point, why are you doing this? If it’s for the liability protection, this may absolutely be the move for you. A lot of people will come to me though and think that it’s more a tax thing and also think that they’re filing say separate taxes for their business and not knowing until after you set up an LLC that like it’s all going through the same tax forms is not really the position that you want to be.

Maggie G (18:36): Yeah, that’s a really, that’s a good point too. Cause that was something I was surprised about when I first uh, filed taxes for my business when I was still working full time. But bringing in a little bit of money on the side, I was like, Oh, I’m just filing that. Like while I’m filing my personal taxes. And I was worried that I was doing it wrong, but I didn’t get in trouble. And then when I did hire someone to help me, they did it the same way. So I was like, Oh, okay. All right, cool. So I was doing it the right way. Um, and so you saying that makes me feel more confident about that too.

Keila H-T (19:08): Yeah, absolutely. The schedule C is a self employed person’s best friend. Um, it’s going to tell you a lot about the types of expenses that you can deduct, um, where it’s going to show up when you have an LLC or a sole proprietorship. Um, and what the IRS has kind of looked in for you to report. So yeah, either way it’s really important for them to get used to, but yeah, keeping in mind that it’s going through the same tax profile as your 10 40.

Maggie G (19:35): Great. Um, so we’ve been talking a lot about, you know, how self-employed people and entrepreneurs need to be thinking differently about taxes, but we haven’t really gone into detail about how that is different. So can you talk a little bit about how taxes and the process is different for someone who’s self-employed versus someone who’s working for someone else?

Keila H-T (19:57): So one of the main things to keep in mind is that when you’re working for someone else, they’re taking the taxes out for you. Every paycheck, you’re getting a little bit less than you were expecting because they’re sending money on your behalf to the IRS and to the state that you live in or the state that you registered to be tested. So the difference between that and when you’re self employed is that two things. One, the IRS doesn’t know how much money you make until you tell them. Um, and two, you need to pay taxes for yourself. And for most people, that means that you’re paying estimated quarterly taxes, which is in a simplistic way to say you’re going to look at your profit for that period. You’re going to do some calculations to determine how much you should estimate to pay the IRS and the state, and then you’re going to sit in the money on their deadlines as requested.

Keila H-T (20:43): Um, remember that this is an estimate. The goal is to pay as close to as much as as you can, but knowing that at the end of the year, they’re going to go through and say, okay, this is how much we made. This is how much tax you owe. Oh, it looks like you already made payments. If you made more payments than you owe, then you’re going to get a refund. If you made less payments, then you’ll owe the tax due. But you may avoid some of the penalties that would come with just waiting till the end of the year to pay it off.

Maggie G (21:09): Yeah. So there it’s basically the same except when you’re working for an employer, they’re the ones taking all of those steps for you. But then if you’re working for yourself, you’re the one who has to do it and think about it and do those calculations.

Keila H-T (21:22): Yeah, and one of the other, um, ad-ons is that you have what’s called self employment tax, which is the employer and employee side of Medicare and social security. So when you work for someone, they pay the employer side, you pay the employee side, it gets taken out of your check automatically. Um, again, you’re making those payments for yourself. But one thing to remember is that when you’re self employed, you are both the employee and the employers. So you pay both sides. One half of that is deductible, but it’s a little bit higher than you would be used to seeing coming out of your check every pay period.

Maggie G (21:56): Hmm. Okay. Yeah. So is that why it feels like you’re technically paying more in taxes as a self employed person than you might as an employed person?

Keila H-T (22:05): Somewhat. And I think the other part is just not really realizing how much of the check is going to tax it. And so when you go to make these quarterly payments or end of the year payments, they feel huge because I think when you’re getting paid by somebody else, you kind of expect that 20 to 25% of your check is going to be gone. You’ve built that into your budget, you know how much your net is going to be. I think when you work for yourself, money is coming in so inconsistently and is coming in as cash or some type of cash equivalent that it kind of surprises you to learn that, Oh, I made $1,000 but you want two 50 of that. You don’t think about it that way when you get a paycheck. But when you’re seeing the cash come in and then you’d have to send it back out, it feels like a lot more than when you’re just getting the net deposited into your account and spending the rest.

Maggie G (22:50): Oh yeah. I feel that for sure. And I think when you have to be so focused on how much things cost, like how much you’re charging people and how much work it actually takes to make however much money you’re trying to make. And then you see like, Oh, okay, but now like 25 to 30% of that needs to go somewhere else. It can be painful. And I’m someone who’s like, I understand techs, like what taxes are for. I understand the benefits that it affords us as a society, but it’s also a little painful and, and makes you cry a little bit when you have to write those checks.

Keila H-T (23:24): Um, honestly I’m an accountant and there are still points where the quarterly tax, then I will come up and I’m like, Oh my gosh, are you serious? First of all, it’s a Testament to checking your financial reports because cause I’m like, did I really make that much? You’re saying that I did and if I really did make that much QuickBooks then yes, I owe this much in taxes. I understand that as a policy, as the way that my business works and just a cost of doing work. But yeah, it’s definitely different when you’ve been seeing all this money kind of sitting in your account and you have to make a conscious effort to say, I’m going to take some of that money out and send it directly to pay our taxes where I don’t see the immediate benefit that I would when I’m paying a contractor or for software or whatever else I’m trying to do. That doesn’t feel as um, it feels good, but not in the same way.

Maggie G (24:13): Yeah. Agreed. Um, so you had, you know, mentioned that it can be much more painful if you’re just making one big lump sum payment at the end of the year when you’re filing versus quarterly. But you know, it also is recommended and, and insisted upon in a lot of cases to be making those quarterly payments. Is there like a penalty to only paying at the end of the year? What kind of happens if you miss or skip those quarterly payments?

Keila H-T (24:43): Yeah, the IRS can charge late and underpayment penalties. Essentially. They are a pay as you go system and want their money throughout the year. Um, and so if you wait until the last minute, I eat the TAC deadline to pay them, they can penalize you as a percentage of what you owe for, um, on that payment. So in addition to the payment that you’ll have to pay for withholding self employment tax, anything that you owe, you’re also gonna have to pay a penalty for paying it late.

Maggie G (25:12): Okay. Yeah, that makes sense. So that’s a, you know, a, a good reason to do it when you’re supposed to and pay on time so that you don’t have to end up paying extra for what you already owed. Cool. So, um, and something else you mentioned about, you know, how we have to be thinking about how much we might be owing and taxes throughout the year and being thoughtful about setting that money aside. What is a good way that you recommend people making sure that they’re actually setting aside that money as they go rather than realizing how much they owe and not actually having the cash on hand.

Keila H-T (25:50): So the quarterly tax payments will definitely help with that because now you have a sense of how much did I make? Take a percentage of that, send it to taxes. And then if you set a blanket percentage, so something like 20 to 25%, you can have a more consistent understanding of how much will have to go out even in the midst of inconsistent income. And so one of the ways that you can do that is if you’re looking at triple profit for that period, um, and making the payment. Then at the end of the year you can see, okay, I made this much, I spent this much intact. Turns out that my tax burden was about this much. If I use that as a baseline percentage for next year, I can assume that I’m going to owe a back this much in taxes. And so to your point, not only does it help with, you know, making your tax payments early so that you’re avoiding penalties but also as again a strategic business practice to say, am I charging enough by the time I take out fees, take out taxes, all of the money that it took to make this course or service or product happen.

Keila H-T (27:00): Is this the right price for that and backing into the number that I actually want to end up at after all of those are accounted for.

Maggie G (27:08): That’s a really good point too because I think people think about, you know, w how much do I want to be earning every year. But then they’re not necessarily thinking about all the expenses that it takes to run a business and how much you’re going to have to actually be paying in taxes. And so your take home pay your actual profit is a lot different a lot of times. So, you know, escalating those fees for your clients or whatever it is that you might be doing can be a good way to offset all those other things so that you can actually live off of what you’re earning.

Keila H-T (27:40): And it helps you make different goals. Like the goal of, I want to make six figures this year means a lot less if you know that it takes $90,000 to make a hundred, um, what do you actually need to live off of? How much do you need to make? And what you realize is you probably don’t need quite as much as you think you do, but with all of the costs that are, that have to be put in place for you to earn this money, that’s not how much you pay yourself. And so for example, if little fish make $1 million, I don’t necessarily make $1 million. Like how much do I actually get to take from that based on all the other things that I have to pay? And so you make different goals when you start incorporating what are all the things that I have to pay for?

Maggie G (28:26): Yeah, absolutely. That, that’s really helpful. Um, so you know, you, you’ve talked about making those estimated quarterly taxes. Uh, you mentioned your QuickBooks. Um, but what are some ways for people to easily take action on paying those taxes? Like where do they actually make those quarterly taxes? How does that work?

Keila H-T (28:47): So the IRS wants their money, so they make it super simple. You go to or you can just go to the front page of and there’s literally a button that says make a payment and you go in and make an estimated tax payment. They’ll not only send you a confirmation email, but you can set up an IRS account where you can go in and see all of the payments that you’ve made this year. Same thing with most States. You can kind of Google estimated tax payments and usually they have a pretty similar straightforward way for you to pay them. It’s funny, they make everything else difficult, but when it comes to payments, they’re like, Hey, we’re going to make that as simple as possible for you to do. Um, and again, remember that the IRS doesn’t know how much you made. So you’re not going to get a bill in the mail. You’re not going to receive any emails to remind you to make these payments. The IRS has no idea that you made income until you tell them. And so the is on you to remember the deadlines, pay them on time and send the money to them electronically or you could mail it. But I’d never recommend that.

Maggie G (29:50): Hmm. Why don’t you recommend that?

Keila H-T (29:52): Because it’s easier. I mean, in a, in a time of technology of being able to get immediate confirmation that I know that it was thin and you told me that you received it. Um, the mail system is not flawless. And so having this feeling of, okay, if I mail these, am I sure that you received it? Am I sure that you applied my payment to the right account? All of those things. Um, you can do it. Millions of people do it without an issue, but given the option, I would say do it electronically.

Maggie G (30:24): Yeah, that makes sense. And, and it’s easier to, you don’t have to go get stamps or go, you know, to the post office or anything like that, get checks. Not everyone has checks for their business account. I know, I don’t. So, um, yeah, that makes sense to me. Um, what is the number one thing that you think business owners get wrong about taxes?

Keila H-T (30:49): I think people have, it’s not a rational, but it feels like irrational fear around it. And so they’re like, I’m scared of it, so I’m just going to avoid it. Um, and you can’t do that. I mean, eventually, either you will get caught or something else. We’ll need you to have, um, taking care of it. So one of the things that will come up often is that people will go to apply for grants or programs and what they’ll ask for is your most recent tax returns, and if you haven’t filed them now, you have to get everything together to do it. That feels like a much more cumbersome process than if you had just taken care of it throughout the year. The other thing that I think becomes an issue is that, um, money comes with a lot of baggage as you know from the work that you do.

Keila H-T (31:36): And so people are so afraid of, you know, um, scarcity or not having enough later on that they’ll make the wrong decision to hold it all and not pay their taxes to cover themselves later because they’re so used to the race of, I just want to make sure that there’s enough here that later on when the tax bill does come due, the cash isn’t available to pay it. Um, and some of that is, you know, trying to be responsible and mature about this idea that like if I have bills to pay, it gets very hard to also think about this theoretical tax bill that’s going to come down the line. But I think some of it too is a misunderstanding of how much money you actually have. Realizing that like 2020 5% of that is not doors. And so you think that you have extra in your account and you’re like, Oh, I can go do things or I can go pay for things. When really that money was already accounted for as a tax expense that you just weren’t paying.

Maggie G (32:35): Yeah, absolutely. And that’s why when I’m talking to clients, mine who are maybe self-employed, I always tell them to be putting 25 30% aside, even just every month so that it’s there when they have to pay those quarterly taxes and it’s there at the end of the year if they still owe a little bit more so that they don’t have to be overwhelmed and stressed and have a tax bill due that they then have to set up a payment plan on or get a lien or something like that. Like those things just are way more painful and difficult to deal with. Then making the tax payments as you go. So I always tell them to, you know, look at it as a bill that you’re setting aside it, putting it in a separate savings account, whatever it needs to be so that you don’t risk spending it because you’ll be better off later.

Keila H-T (33:24): Yeah, and the separate account is key. I think having it in another place reminds you that it’s already dedicated to another expense and that gets much harder to do when it’s all in one account and you have to kind of tell yourself like, don’t forget some of this money has to go to taxes. When you see it in a separate account, it also makes it so that if you go to spend it, you have to make a conscious decision to take it out as opposed to just kind of bringing your balance down in a way that doesn’t necessarily feel like spending money that should be going somewhere else.

Maggie G (33:55): Right. And it’s easy to do that. It’s easy to spend more money than is really available to you when you’re not separating it and just consciously thinking of it differently. That’s why I, another thing I recommend is labeling your different accountants for the things that they’re actually for. So I have a tax savings account in my business account. I have an emergency fund in my business account and then my checking is where I pay myself for, you know, I transfer money to myself or I am paying for other expenses. And so keeping all of that separate just makes me feel better and reminds me of how much I actually have set aside for things like taxes.

Keila H-T (34:34): Absolutely. That’s good practice. And I recommend it to all of my clients as well.

Maggie G (34:39): Great. And so related to that, how, how are some other ways that business owners can be more organized with their expenses, their bookkeeping and their tax planning throughout the year?

Keila H-T (34:53): So a couple of things. One, when it comes to your bookkeeping, keep up with it. Check on your books every week to two weeks instead of waiting every three months to do it. Not only will that, um, make it so that it’s not such a cumbersome task and will also help jog your memory about things. So maybe you took a trip to New York and you caught the lodging and you caught the, um, transportation up there, but you forgot to include the taxis. Um, a month from now, two months from now, you might not remember that, but in the past week or so it may jog your memory that that’s an expense that you should be, um, taking a manager of. The other thing that I would say is receipts. So a lot of people save a shoebox of receipts, add, tell clients the time, I don’t deal with those. Um, one, I’m not going through all of them to try to sort out where they go, but to the reality is if you were asked for them, you wouldn’t be able to find it and the IRS audited you and you just gave them all of these receipts.

Keila H-T (35:51): You don’t even know what you have are all of your receipts there. Um, so what I tell people is to take a picture of the receipt or save the invoice as a PDF from their email and put it in your cloud storage of choice, whether that’s Google, drive, Dropbox, anything like that. And then sub categorize by category or my month, whichever one makes it the easiest for you to go back and find. And also remember that just because you don’t have the receipt doesn’t mean you can’t end up the expense. Um, the IRS is really most interested in making sure that the expense was actually incurred. And so you can prove that by showing your bank account statement, your credit card statement, there’s other ways to show support that you actually spent the money. But if you have the receipt and you are going to save it, do it electronically rather than by paper. Um, it also makes it so that if you have to access it later, obviously having it in the cloud makes it so that you can get it at any point and so that you can pull it up more easily than if you haven’t, um, in paper and office.

Maggie G (36:51): That’s really helpful cause yeah, I think I’ve heard the horror stories of having the shoe boxes, the suitcases filled with receipts and I even have a couple folders in my filing cabinet with them. Um, that, you know, like you said, might not actually know what’s there, but just in case it’s there. Um, so that, that’s a really good point. I’m saving it to the cloud so that it’s just always there and it’s a little bit more organized. Um, are there any platforms, I know there’s a lot of different bookkeeping platforms out there now. Are there any that you specifically like or recommend?

Keila H-T (37:27): Um, we recommend QuickBooks a lot because um, most of our clients use it. Um, it is one of the oldest, so they have a lot of integrations that are really good. Um, and it’s, I mean I say that it’s user friendly. Once you understand it, once you understand kind of what you’re looking at it, it’s really intuitive to try to get everything in order for yourself. Um, you can pull your financial statements from there so you’re not building them from scratch. Um, they also will connect to your bank accounts so that you can pull in all of your transactions and not have to meet annually, remember what you spent and really just focus on how to categorize them properly. Um, but there are other options. Wave is a free option. They were recently purchased by H and R block. Um, Wave does not feel as intuitive all the time for me, but once you get the hang of it, again, it’s free does a similar function in terms of connecting to your bank accounts and making sure that your financial statements are ready for you. My goal is to get people off of using say Excel and really into something that’s pulling those transactions down for you automatically so that you don’t have to waste your time trying to remember everything that you spent. The other idea is that you can manipulate how you view your financial statements. So being able to see how did I do last month versus how do I do for the whole year is going to be beneficial to you and an option that you can use in Ireland. Those platforms.

Maggie G (38:51): Yeah, and I’ve used both of them at different times, you know, kind of playing around with which ones I like and what the different functionalities are and one things. One thing I really liked about QuickBooks is you can upload the receipts as a photo for each expense, so it’s organized specifically that way. That’s something that wave is not as great about for some reason. Um, but yeah, if you wanted something that’s free wave is that great option. QuickBooks is another. So, um, it’s great that there’s just different things to choose from. Um, but you know, you might be biased about this question just because of what you do. Um, but when might someone want to hire a bookkeeper or a tax accountant to help them rather than doing it on their own?

Keila H-T (39:37): So that’s actually really interesting because I have clients who will come to me who I like, I don’t want to do my accounting, I want to give it up and have you do it. And I’m like, I don’t know that you really want to hand that off to pay me to do it yet. Because there are a couple things. One, I think that you as a business owner need to understand your numbers and this idea that if I hand off the task, I also hand off the responsibility is incorrect. You still need to understand like how do these numbers get into financial statements? Do I trust them? Do I have a gut check that this makes sense to me. I think I made about that much last year or this number for office expenses looks about right. You should be able to check that and say, Whoa, that number is way off.

Keila H-T (40:19): I think something was miscategorized and I think the best way to learn that is to do it for yourself at the very beginning, um, of categorizing, um, your transactions, looking at the information that you want to know. And then I say that that’s then a main point when you want to call somebody. So at the beginning, but maybe not at the very beginning, you’re going to want two things. The first thing is you’re going to want to advice on how to start the business. So I think that’s a good point to check in with an accountant. Um, maybe that’s not the time to hire an accountant. You know, I have a newsletter that goes out every two weeks. I have a podcast that goes out, um, one season at a time, weekly. Um, and then I also try to give tips and tricks on our Instagram so that you have some foundational place.

Keila H-T (41:09): Um, I’m also going to launch a course for starting businesses later this year. So I think that that’s kind of a place to start where you don’t necessarily have to get an accountant on retainer or automatically hire somebody, but you do need accounting guidance. And then I think once you start through those initial steps, you’ve set up the business. You’ve started with an accounting system, you’ve at least tried some out to see what you might be interested in. You’ve got a business bank account. Those kinds of first steps are done. That’s going to be the time where it’s really most beneficial for you to check in with an accounting from a bookkeeping standpoint. And so while I think that they stand at two separate points, they’re both important, but you don’t necessarily need the same thing. By the time you get to a place where you want to hire somebody, you should already, um, um, either be in business or know what the business is doing and have some kind of understanding of what the numbers are doing for you so that you’re not just kind of handing it all off with no understanding of what’s being done for you behind the scenes.

Keila H-T (42:06): Cause I think also that’s how you know that you’ve hired the right bookkeeper or the right accountant for yourself. If you have no idea what your book should look like, how do you know that they’re doing a good job for you?

Maggie G (42:17): That’s a really good point. Yeah, it’s, it’s just like with any, anything in life, but also anything that includes money is if you don’t understand, then how do you know that someone else might be doing it? Right? Like you, they might’ve missed something because they’re not in it day to day. And so you have to have that basic understanding in order for the other person to be able to do their job well and get everything right. Um, so if someone was ready to hire a professional to help them, what are some questions that they should be asking to make sure that they’re hiring the right person?

Keila H-T (42:53): I’m partially want to ask what type of accounting work they do. And I think that’s really important with accountants and also with law actually is there’s this assumption that like you do numbers and so you will do everything with numbers. So for example, there are accountant firms that don’t do taxes. There are accounting firms that only do taxes and won’t do any bookkeeping. Um, there are some that will do your right now but are not willing to do, say your forecasting and budget spending for you. Um, there may be accounting firms that are all inclusive for accounting functions, but don’t do finance functions like personal finance or investment, um, wealth building, things like that. And so you want to figure out what they do, even if you’re still trying to kind of figure out what you need. I don’t think there should be an expectation that you come in and you’re like, I need these five things.

Keila H-T (43:39): Tell me if you can do them, but you can at least have a sense of what pain points you have, what things you struggle with and what things they might be able to help you with. The other thing that I would ask is what types of clients they service. Again, because different firms serve as different clients. You may run into a firm that only does individuals and doesn’t deal with businesses. Maybe some firms do vice-versa, only deal with businesses and not firms. The other question that I would ask is, um, depending on your level of communication or what kind of needs that you have in terms of, uh, being kept in the loop, how does their communication style work? How does their process work? Can you expect to hear from them once a month? Um, are they not going to talk to you unless something is loud?

Keila H-T (44:24): What things do you need to have to feel comfortable? And does this accountant or bookkeeper line up with those needs? The last thing that I would ask is kind of what they offer that feels different. Um, I think you can have a lot of professional services and they may not, I mean most people are not used to being asked this question, uh, generally let alone about their business, but really getting an idea of like what they offer that would be different for you. For example, one of the things that we really strive to do is to make sure that the process is transparent and so we want to make sure that you understand where we’re putting things that you understand, you know, why things are being handled a certain way. Why are we, um, categorizing something a certain way? What we noticed about your books this month, over last month.

Keila H-T (45:17): And that really gets to the, that gets to the core of whether or not people need to hear all of that. There may be clients that are like, I don’t care about any of that. I just want you to put my books in order and I’ll look at it later. But this is how we work. This is the process that we go through. This is what our mission and values and our promise to you are. Does that align with what you want out of the people that you’re working with. And I think when it comes to money, it’s such an intimate process that even when it’s around business finances, you want to make sure that you’re working with someone who feel good for you. And so having the time to be able to sit down and say, this is what I’m looking for, this is the type of relationship that I want to build or partnership that I want to build and make sure that they’re doing that. That goes above and beyond. Yes, I can make financial statements for you every month because all accountants should be able to do that for you. But what can they do specifically for your business?

Maggie G (46:14): I love that. So it goes so far beyond just the numbers and just, you know, filing taxes and uh, balancing the books and all of that. It really is also about the relationship and making sure that you’re getting someone that is working with you the right way and that you can work well together and you’re getting what you need. Just not just financially but also emotionally. Cause, like you said, business and money, those are very emotional things.

Keila H-T (46:40): Yeah. Especially because I work with such small clients, like even if revenue wise they’re bursting at the seams in terms of income. If you’re one person running a business and you live off of this and so it’s more than just I gave you financial statements, maybe we need to have a talk about how much you’re paying yourself. I may not be your financial planner, but we do need to have a discussion about like, are you paying too much in taxes? Is that, you know, harming how you manage the other expenses in your business. And so it needs to be, um, a comprehensive relationship around money. And there obviously have to be boundaries. I can tell people all the time, like, I’m not your lawyer. So there are certain things that I can’t build for you, but I can tell you the tax impact of, but those should be relationships that you feel comfortable back to asking questions and not feeling stupid or like you’re bothering somebody when you have to ask something because you’re paying them for a service and they should be supporting you.

Maggie G (47:38): Yeah, that’s so true. I love that. Um, great. So is there anything else that you would like people to take away from this conversation?

Keila H-T (47:48): I would just say, I mean, it’s easier said than done, but try not to be afraid around it and get as much information as you can. I think that the more information you have, the less fear stands because you can ask, um, what I call better questions. All right. I don’t understand this at all, but I actually have a better sense of how this piece works. And so I don’t feel as uncomfortable around with it. And also just understand that the idea is not for you to become a CPA at the end of the day. Like there’s a reason that I do this for a living and that I don’t do other things. Um, your job is not to be the accounting expert and so when you need help, ask for it. Go to a place where you know your needs can be met at a price point, an entry point, um, a comfort level that meets what you need but don’t go at it alone. Um, I think a lot of people assume like, I don’t make enough money and I’m not big enough or you know, I don’t need an accountant yet. You always need accounting advice at what level you need. It differs for everybody, but like find that entry point and get what you need until you need more as opposed as opposed to just kind of avoiding it until it’s a necessary evil at which point it may not be too late, but it’s going to be a lot more uncomfortable than it has to be.

Maggie G (49:05): Yeah, absolutely. Asking for help is so important. Um, so is there anything you’d like to promote to people to make sure that they know about?

Keila H-T (49:15): Um, we are coming up with a starter kit that will be launched in the upcoming months for brand new business owners. I get a lot of calls of people who are like, I just started a business and I know I need an accountant but I don’t even know what I need. And so we’re um, creating and presenting something for you to get yourself started so that you at least have a soft landing place. Um, we’re also going to have a course that comes out probably towards the end of the year that will kind of build on that. Okay. You’ve got the first steps in, you have some information now that you’re kind of in the midst of running the business. What are the things that you need to be, um, paying attention to? But other than that, we have a newsletter that goes out at least monthly. We’re doing really well at getting it out biweekly.

Keila H-T (50:01): That gives just a lot of tips and tricks on upcoming events, but also just information that you might not have thought about. So, um, when is the time to hire somebody and what’s the difference between a contractor and an employee? Um, the points that we talked about earlier about really what are the ins and outs of having an LLC. And then lastly, season two, uh, fish food will be dropping, um, later this fall, probably October. And so we look forward to getting any and um, suggestions or any information about things that people would like to hear. Just wanting to make sure that like even if the resource is going to be free, it’s valuable. And so we want to meet all of the needs of the people who are listening and reading and making sure that we’re providing as much as we can.

Maggie G (50:45): Yeah. Awesome. And how can folks get in touch with you directly?

Keila H-T (50:51): So, um, you can go to the website, it’s little fish There. You can schedule a council, you can find out more about the business and the services that we offer. We are also active on Instagram at little fish accounting. Um, and lastly, if you need to shoot us an email to ask a question or to provide feedback or to give us, like I said, suggestions on the podcast or the newsletter, anything that you’d like to give us, you can shoot us something [email protected].

Maggie G (51:22): Great. Well thank you so much. This has been super helpful. Definitely illuminating for me as a business owner and I’m sure for others, so I appreciate you taking the time to share all your wisdom.

Keila H-T (51:33): I’m happy to be here and looking forward to everybody who has listened and has found value in the podcast.

Maggie G (51:40): Great. Thanks so much.

Maggie G (51:43): Thanks for tuning in to the money circle podcast this week. Make sure that you rate, review and subscribe so that you never miss an episode. It might not seem all that important, but subscribing and rating actually helps to get the money circle podcast in other people’s ears. If you’d like to get more connected with Money Circle or with me, there are lots of ways you can do that. To join the free Facebook group, visit circle group to stay informed of any upcoming events. Subscribe to my weekly newsletter at If you’d like to join the virtual circle membership group, visit To learn more about my financial coaching services, my speaking and workshop offerings, or just to read my blog, visit You can also follow me on Instagram and Twitter @MaggieGermano. Thanks so much for listening. Bye bye.