Grass Roots Taxes

Grass Roots Taxes Taxes, Bookkeeping, and Tax Resolution for small businesses and individuals.

10/06/2026

Once upon a tax time, Bigfoot came into Diane’s office because he was being audited.

He only grunts.

Diane understands him perfectly.

The audit was about NIL money.

NIL means name, image, and likeness.

Bigfoot had mascot deals for about 6 sports teams, a beef jerky deal, and residuals from the 1976 “In Search of” movie.

The IRS agreed he reported the 1099 money.

The problem was the stuff.

Beef jerky.
Clothing and outfits.
Use of a car.
Other in-kind compensation.

If they pay you in stuff, that can still be income.

And NIL income may be self-employment income, meaning income tax plus self-employment tax may apply.

Also, if you get an IRS notice or audit letter, you need to respond.

Diane will help Bigfoot through it.

No, she cannot accept beef jerky as payment.

And remember kids: kids as young as middle school are receiving sports deals and NIL money. Parents and guardians need to get a qualified tax professional involved and make sure the taxes are filed correctly.

Do not let a child enter adulthood in a heap of tax trouble.

Share this with a parent of a young athlete, influencer, or anyone getting paid in cash, products, or beef jerky.

General education only. NIL tax rules and audit responses depend on the facts.

10/02/2026

Your LLC is not magic paperwork.

If you get sued or audited, someone may try to argue your business is not separate from you.

That is when they start looking at personal assets.

Your house.
Your car.
Your grandma’s jewelry.

So what do you do?

Run your small business like a big business.

First, keep business and personal money separate.

Do not use your business account as a personal slush fund. If you need personal money, move it properly out of the business first, then spend it from your personal account.

Second, keep a corporate record book.

If you formed an LLC online and got an EIN, that may be good enough for the bank.

It is not the whole job.

You need an operating agreement.

The LLC is not your business. The LLC is the box. Your business goes inside the box.

The operating agreement defines the box: who owns it, who runs it, who can write checks, how decisions are made, how partners are added or removed, and what the business can do.

Even if the answer to every question is “me,” write it down.

Then keep meeting minutes.

Meeting with yourself sounds weird. Do it anyway.

Operating agreement:
https://eastsquare.krtra.com/t/i3W8jcRA90Cp

Meeting minutes and corporate record book resources:
grassrootstaxes.com/shop

Share this with someone who formed an LLC and stopped there.

General education only. Ask a qualified attorney or tax professional about your situation.

10/01/2026

How do you owe $3.3 million in taxes on $1 million in income?

Win the money.
Do not report it.
Let penalties and interest run for about 25 years.

The first winner of Survivor won $1 million in cash.

That prize money was taxable.

Game show winnings are taxable.
Lottery winnings are taxable.
Casino winnings are taxable.
Contest winnings are taxable.

He did not report the $1 million on his 2000 tax return, or certain residual income on his 2001 return.

In 2006, the IRS brought a criminal tax evasion case.

Tax evasion is a crime.

He went to prison.

Problem solved?

Wrong.

Prison does not pay your taxes.

Going to prison handled the criminal part. The tax debt, penalties, and interest were still there.

He was also ordered to amend or refile returns. He did not do that, and he went back to prison for 11 months in 2009.

Roughly 25 years later, the tax bill is now about $3.3 million and still collectible.

Moral of the story:

If you win big money, have the taxes withheld right then and there.

You didn't have the money 5 minutes ago. You won't miss the withholding.

Then see a real accountant and file the tax return properly.

Share this with someone who thinks prize money is free money.

General education only. Ask a qualified tax professional or attorney about your own situation.

09/29/2026

Once upon a tax time, Karen walked into Diane’s office with 17 dependents and about 100 IRS letters.



She had so many children, she didn’t know what to do.

She also lived in the giant shoe sculpture in the city park.

That became a problem.

Karen said the children were her grandchildren and great nieces and nephews. She said nobody else claimed them. She said she needed the refund money.

But that is not how dependents work.

You cannot claim children just because nobody else does.

You cannot claim children because you need the money.

You have to qualify, and you have to be able to prove it.

That may include relationship, age, residency, support, dependency, household costs, and other rules depending on the credit or filing status.

Refundable credits put money in your pocket, so the IRS may ask for documentation.

No documentation, no free money.

And remember, kids: it’s a federal crime to lie on your taxes. Stay out of trouble and don’t take money that isn’t yours.

Share this with someone who likes fairy tales, tax lessons, or IRS letters dumped dramatically onto a desk.

General education only. Ask a qualified tax professional about your own situation.

The first Once Upon a Tax Time short is almost here.
09/28/2026

The first Once Upon a Tax Time short is almost here.

09/28/2026

Giving away real estate is a curse.

A tax curse.

If grandma gives you her house while she is alive, your basis is generally grandma’s basis.

Not zero.

Buzzer.

Government math could never be that easy.

That means what grandma paid, plus capital improvements she can prove.

Did she keep receipts for the 1965 addition, the 1968 driveway, and the 1970 backyard fence?

Does she?

If she bought the house in 1961 for $10,000 and it is worth $400,000 now, you may have a $390,000 gain if she gifts it to you and you sell it.

Guess what you may be paying taxes on.

Oh, yeah.

But if you inherit the house after grandma goes to meet Jesus, your basis is generally fair market value at death.

If you inherit it at $400,000 and sell it right away for $400,000, your gain may be zero.

Zero zero zero.

That is why we do not casually gift real estate while someone is alive.

Put it in a will. Put it in a trust. Talk to qualified professionals.

Share this with the person who thinks grandma should just sign over the house.

General education only. Real estate transfers, basis, gifts, inheritance, trusts, wills, capital gains, and state law depend on your facts.

09/24/2026

A shoebox of receipts is not a bookkeeping system.

It is a cry for help.

Receipts are great. Bank statements are great. Credit card statements are great.

But that is not the whole story.

Business expenses need a business purpose.

A bank statement with Walmart highlighted does not tell me what you bought or why it was business.

A stack of restaurant receipts tells me nothing about who was there or what business was discussed.

A pile of gas station receipts tells me even less unless I know what trip, job, mileage, or equipment they relate to.

If you cannot explain the business purpose to your tax preparer, how are you going to explain it to an IRS agent in an audit?

Get a bookkeeping system now.

Not at the end of tax season.

Now, while you still have time to get the records together.

Share this with a small business owner who has a receipt pile quietly judging them.

09/23/2026

Do you need QuickBooks?

Diane says no.

And she has used QuickBooks since 1997, so this is not coming from someone who just discovered bookkeeping yesterday.

This video is not sponsored. Diane is not getting paid for any of this.

Her favorite overall bookkeeping system is Xero.

It costs about half of QuickBooks, it is easier to use, and Diane likes that it does not allow some of the gross mistakes QuickBooks can let people make.

For complicated invoicing, especially if your customers change their minds 5 times before they know what they want, Diane likes FreshBooks.

Wedding businesses, software developers, artists, creative work, custom projects, change orders, revisions: FreshBooks for invoicing.

For simple expenses and mileage, Diane loves Expensify.

It is cheap, around $5 a month, and it tracks expenses and mileage.

But listen carefully:

Expensify does not track your income.

So if you need income, invoices, or customer tracking, you need something else too.

As for QuickBooks, Diane has concerns about the company direction, loan marketing, Credit Karma, Mailchimp, and data/contact issues.

Her blunt opinion:

“At this point in time, I would rather count on my toes than sign up for QuickBooks.”

There are way better choices.

Share this with a small business owner who thinks QuickBooks is the only option.

09/22/2026

If the IRS or state sends you a letter, throwing it in a pile on your desk is not self-care.

Open it.

That is step 1.

People call Diane all the time and say, “I got a letter from the IRS.”

First thing she says:

Send me a picture of the first page.

Why?

Because half the time it is not from the IRS.

It may be from the state, the county, or another agency. The first page usually tells you who sent it, what tax year it involves, what amount matters, whether there is a deadline, and what action they want.

And sometimes the scary-looking thing is not scary.

In Diane’s state, refund checks are called “warrants.” Taxpayers see “warrant” and think there is a warrant out for their arrest or that they owe the state $350.

No.

It may be the $350 state refund check they need to cash.

“We did your tax return. You’re supposed to get a $350 refund from the state. Why will you not cash the check?”

People trust fear more than they trust an expert in taxes.

If you do not understand the letter, find out what it means.

If it demands money and you ignore it, the balance usually goes up.

Share this with someone who has a scary mail pile.

09/21/2026

When money comes in, taxes show up.

Even if you just call it a side hustle.

Deliveries. Uber. Shopping gigs. Art. Photography. Refereeing. Social media management. Gig apps.

If you are getting paid, you may be self-employed.

You are a business.

I know. Nobody told you.

The app may send you a 1099, but the app is not going to sit you down and explain income tax, Social Security tax, Medicare tax, mileage logs, receipts, phone, internet, and recordkeeping.

If they did that, fewer people would work for them.

You need to track income and expenses in a businesslike manner.

Especially mileage.

Use an app. Use Google Maps. Use something. But keep track of your mileage from when you leave to do business work until you get back.

Side hustles make you a small business, whether that is what you bargained for or not.

Share this with someone doing gig work who needs the “nobody told me” tax reality check.

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