Roland Fink & Co, CPA

𝗗𝗼 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝗮𝗽𝗽𝘀 𝗿𝗲𝗽𝗼𝗿𝘁 𝗺𝘆 𝗮𝗰𝘁𝘂𝗮𝗹 𝗽𝗿𝗼𝗳𝗶𝘁 𝘁𝗼 𝘁𝗵𝗲 𝗜𝗥𝗦?

Third-party payment apps report your gross transfers to the IRS.

Say you originally bought a couch for $1,200 and later sold it through Cash App for $400.

If you keep the record showing what you originally paid, you can prove that $400 transfer wasn’t a $400 gain. You sold the couch at a loss.

Don't rely only on PayPal, Venmo, Cash App, or whichever payment platform you're using to track things for you.

Keep the records that show what those payments actually represent.

What Are the Disadvantages to Sole Proprietorship for Growing NoHo Arts District Business Owners?

What Are the Disadvantages to Sole Proprietorship for Growing NoHo Arts District Business Owners? Discover the key disadvantages to sole proprietorship once profit hits $40k. Learn how self-employment tax eats into your revenue and when to switch.

𝗛𝗼𝘄 𝗱𝗼 𝗜 𝗸𝗻𝗼𝘄 𝗶𝗳 𝗺𝘆 𝘀𝗶𝗱𝗲 𝗶𝗻𝗰𝗼𝗺𝗲 𝗶𝘀 𝗰𝗼𝗻𝘀𝗶𝗱𝗲𝗿𝗲𝗱 𝗮 𝗵𝗼𝗯𝗯𝘆 𝗼𝗿 𝗮 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀?

Getting paid via Venmo or PayPal doesn't automatically make your side income a business. The IRS looks at how you operate and whether your primary goal is making a profit.

If you keep separate books, set aside regular work hours, and take on ongoing gigs like freelancing or tutoring, you're operating as a business.

If you're just making money here and there from something you do for fun, like streaming or selling a few crafts, that's usually hobby income. You aren't really trying to make a living off it.

This distinction completely changes your tax setup. Business owners report their earnings on Schedule C and can deduct ordinary expenses to lower what they owe. If your side income is more of a hobby, you report the earnings on Schedule 1 as other income, but you can't write off any expenses against it.

𝗔𝗿𝗲 𝘆𝗼𝘂 𝗮𝗹𝗿𝗲𝗮𝗱𝘆 “𝗺𝗼𝗻𝗲𝘆𝗺𝗮𝘅𝘅𝗶𝗻𝗴” 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝗸𝗻𝗼𝘄𝗶𝗻𝗴 𝗶𝘁?

It’s the social media term for getting more value from your money, like cutting expenses or even putting rewards points to use.

𝘞𝘩𝘢𝘵’𝘴 𝘰𝘯𝘦 𝘸𝘢𝘺 𝘺𝘰𝘶’𝘳𝘦 𝘨𝘦𝘵𝘵𝘪𝘯𝘨 𝘮𝘰𝘳𝘦 𝘧𝘳𝘰𝘮 𝘺𝘰𝘶𝘳 𝘮𝘰𝘯𝘦𝘺 𝘳𝘪𝘨𝘩𝘵 𝘯𝘰𝘸?

𝗖𝗼𝘂𝗹𝗱 𝗺𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 𝗽𝘂𝘁 𝗺𝘆 𝗽𝗲𝗿𝘀𝗼𝗻𝗮𝗹 𝗮𝘀𝘀𝗲𝘁𝘀 𝗮𝘁 𝗿𝗶𝘀𝗸?

If you’re operating as a sole proprietor, there’s no legal separation between you and your business.

So if your business can’t pay a creditor or gets hit with a lawsuit, your personal savings, home, or vehicles could be exposed too.

As your business grows, make sure the way you operate reflects that growth.

That may mean forming an LLC or corporation, then moving your business banking, contracts, insurance policies, vendor accounts, and payment processors into the company’s legal name.

The goal is to create a clearer line between what belongs to you personally and what belongs to the business.

𝘞𝘩𝘪𝘤𝘩 𝘱𝘢𝘳𝘵 𝘰𝘧 𝘴𝘦𝘱𝘢𝘳𝘢𝘵𝘪𝘯𝘨 𝘺𝘰𝘶𝘳 𝘣𝘶𝘴𝘪𝘯𝘦𝘴𝘴 𝘧𝘳𝘰𝘮 𝘺𝘰𝘶𝘳 𝘱𝘦𝘳𝘴𝘰𝘯𝘢𝘭 𝘧𝘪𝘯𝘢𝘯𝘤𝘦𝘴 𝘥𝘰 𝘺𝘰𝘶 𝘩𝘢𝘷𝘦 𝘲𝘶𝘦𝘴𝘵𝘪𝘰𝘯𝘴 𝘢𝘣𝘰𝘶𝘵? 𝘞𝘦 𝘸𝘰𝘶𝘭𝘥 𝘭𝘰𝘷𝘦 𝘵𝘰 𝘢𝘯𝘴𝘸𝘦𝘳 𝘵𝘩𝘦𝘮 𝘪𝘯 𝘵𝘩𝘦 𝘤𝘰𝘮𝘮𝘦𝘯𝘵𝘴.

𝗪𝗵𝗮𝘁’𝘀 𝘁𝗵𝗲 𝗯𝗲𝘀𝘁 𝘄𝗮𝘆 𝘁𝗼 𝗳𝘂𝗻𝗱 𝗺𝘆 𝗹𝗶𝗳𝗲𝘀𝘁𝘆𝗹𝗲 𝗶𝗳 𝗜 𝗿𝗲𝘁𝗶𝗿𝗲 𝗯𝗲𝗳𝗼𝗿𝗲 𝗦𝗼𝗰𝗶𝗮𝗹 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆 𝗸𝗶𝗰𝗸𝘀 𝗶𝗻?

Draw cash strategically across three accounts to keep your tax bill as low as possible.
• Pull just enough from your Traditional IRA or 401(k) to fill up the lowest tax brackets (10% or 12%).
• Cover remaining living expenses with taxable savings or brokerage cash so you don't push yourself into a higher bracket.
• Use tax-free Roth IRA dollars for big one-off expenses with zero tax impact.

Balancing your withdrawals this way keeps your overall tax rate low and can even unlock 0% capital gains rates.

𝗔𝗺 𝗜 𝗮𝗰𝗰𝗶𝗱𝗲𝗻𝘁𝗮𝗹𝗹𝘆 𝘀𝗵𝗮𝗿𝗶𝗻𝗴 𝘀𝗲𝗻𝘀𝗶𝘁𝗶𝘃𝗲 𝗱𝗮𝘁𝗮 𝗲𝘃𝗲𝗿𝘆 𝘁𝗶𝗺𝗲 𝗜 𝘁𝘆𝗽𝗲 𝗮 𝗽𝗿𝗼𝗺𝗽𝘁 𝗶𝗻𝘁𝗼 𝗔𝗜?

You could be. Time to fix that.

(We already make sure all privacy settings are enabled for any AI tools we use here.)

https://www.zdnet.com/article/how-to-keep-ai-conversations-private-chatgpt-gemini-copilot-claude/

𝗛𝗼𝘄 𝗰𝗮𝗻 𝗜 𝗴𝗲𝘁 𝗰𝗮𝘀𝗵 𝘁𝗼 𝗲𝘅𝗽𝗮𝗻𝗱 𝗺𝘆 𝗯𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝘄𝗶𝘁𝗵𝗼𝘂𝘁 𝘁𝗮𝗸𝗶𝗻𝗴 𝗼𝘂𝘁 𝗮 𝗹𝗼𝗮𝗻 𝗼𝗿 𝘀𝗲𝗹𝗹𝗶𝗻𝗴 𝗲𝗾𝘂𝗶𝘁𝘆?

Consider looking into the R&D tax credit.

Eligible small businesses can apply up to $500,000 per year of their R&D credit directly against quarterly payroll taxes. That cuts your quarterly payroll bills almost immediately, keeping extra cash in your bank account to hire talent or fund new projects.

To prepare for claiming it, build your paper trail early:
• Flag projects as they start
• Keep basic project logs
• Make sure contractor agreements state your business owns all the work

𝗪𝗵𝗮𝘁 𝘀𝗵𝗼𝘂𝗹𝗱 𝗜 𝗱𝗼 𝘄𝗶𝘁𝗵 𝗺𝘆 𝘁𝗮𝘅𝗲𝘀 𝗯𝗲𝘁𝘄𝗲𝗲𝗻 𝗹𝗲𝗮𝘃𝗶𝗻𝗴 𝗺𝘆 𝗷𝗼𝗯 𝗮𝗻𝗱 𝘁𝗮𝗸𝗶𝗻𝗴 𝗦𝗼𝗰𝗶𝗮𝗹 𝗦𝗲𝗰𝘂𝗿𝗶𝘁𝘆?

A core strategy we suggest during this retirement gap is a Roth conversion staircase:
• Move funds from your traditional IRA into a Roth IRA when your income sits in lower tax brackets.
• Pay taxes today at low rates so that money and its future growth stay 100% tax-free.
• Convert in stages each December to fill your target bracket line, instead of moving a single lump sum that spikes your tax bracket.

𝘖𝘯𝘦 𝘤𝘳𝘪𝘵𝘪𝘤𝘢𝘭 𝘳𝘶𝘭𝘦: Pay the taxes using cash outside your IRA, such as a high-yield savings or taxable brokerage account. Withholding tax money directly from the IRA reduces your tax-free shelter and triggers a 10% IRS penalty if you're under age 59½.

If you recently left your job or plan to step away soon, DM us to find out how to map out your retirement gap.

What Qualifies For Research and Development Tax Credit Claims For NoHo Arts District Small Businesses?

What Qualifies For Research and Development Tax Credit Claims For NoHo Arts District Small Businesses? Find out what qualifies for research and development tax credit claims for small businesses, from software builds to 3D printing and test kitchens.