2022 HBB Accounting Coaching Call Notes

  • Why this is important: Everything we do and all the deductions you take is based on you having a business. It is also your end of the bargain to maintain a business. So, if you ever stop conducting business, please let us know.
  • Profit Motive (Revenue minus Deductions); You have about $10,000-$15,000 in base deductions. Your goal with your business must be to get your revenue higher than your deductions. You have some time to do this, but you want to have a plan of how to get there. That plan can be a dream and doesn’t need to be based on your current circumstances.
  • Working on your business consistently. We and other accounting firms use as a general rule, 45 minutes a day 3–5 days a week.
  • Revenue and Consistent Revenue some revenue is necessary, but it is not the end all of whether you are a business.
  • 3 out of 5 year rule says that it is up to the government to prove you are not trying to make a profit the first 2 years you are in business.
  • How do I prove this? Journal activities and time spent on business and have electronic records. A Google Document or Google Sheets are highly recommended because they are backed up and time stamped.
  • For liability protection
  • LLC’s can be changed into an S-Corp. An S-Corp can run at a loss without being declared a hobby. This would be something you would want to think about once you get to your third year and you are not at a profit yet.
  • If you are making over $20,000 in Net Profit (Net Profit is revenue minus all of your expenses). Generally this would be around $50,000 in revenue. In this case you would have an LLC and treat it as an S-Corp. Decision needs to be made by March 15th.
  • You may save a little more money or in some cases (such as a car purchase) a lot more money
  • You will be better protected in the case of an audit
  • We can do your books more accurately
  • Home Office, You can take the percentage of your Office Space divided by your total square footage. A percentage of all costs (including rent if you rent) that go into your home if you have a home office. 25% is a reasonable limit.
  • Health Insurance
  • Cell Phone and Internet
  • Office Supplies, most physical things that are useful for your business. Computer, tablet, step stool. Small ticket items: if it is a deduction take it as a deduction.
  • Continuing Education /Training /Personal Development /Conferences /Certificates.
  • Tax Preparation (our services) or any professional service you use for your business like legal.
  • Advertising Costs, Instagram, Facebook, Tic Tok, Snap Chat
  • Software as a Service
  • Any costs that go into making your product

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We are an accounting firm that specializes in people with part time and small businesses. We make sure our clients save the maximum amount they can.

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HBB Accounting

HBB Accounting

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We are an accounting firm that specializes in people with part time and small businesses. We make sure our clients save the maximum amount they can.