More Deductions, More Fun: When You Mix Business and Pleasure

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This week on the Sunlight Tax Podcast, I’m diving into tax deductions for freelancers and small business owners. I’ll walk through the IRS rules you need to understand, plus how setting up simple automated systems can help you capture more legitimate deductions, save time, and take some of the stress out of tax season.

Also mentioned in today’s episode:

00:10 Introduction to Business Deductions and IRS Rules

02:04 The Importance of Documentation and Automation

03:54 How to Track and Deduct Business Travel Expenses

06:07 Understanding Mixed Use Items and Partial Deductions

08:00 Examples of Deductible Expenses and Personal Travel

10:12 Resources for Learning and Setting Up Deduction Systems

12:13 The Benefits of Proper Deduction Planning

13:57 Details of the Sunlight Tax Intensive Program

14:52 Encouragement and Final Tips for Business Owners

If you enjoyed this episode, please rate, review and share it!
Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.

Episode Links:

Learn more about the Intensive

My upcoming in-person workshop with The Art Students League of New York

Link to join the First Official Cohort (9/23 & 9/24). Investment is $1850

Get my Tax Help on Substack

Get your FREE visual guide to tax deductions

Order my book: Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed

Watch YouTube video version

Transcript:

Hannah Cole (00:00)

a lot of people are not aware of those rules. And of course, if you're not aware of the rules, you're very much not aware of the documentation requirement of those rules. But the flip side, the corollary, is really nice. Once you learn the rules and the documentation requirement and you set it up so that it's sort of automatically tracking that thing in the background, you no longer actively have to think about it ever again, and you get a much bigger deduction every year.

Hey gorgeous. I hope you're doing well today. I'm feeling super happy because you know I've had quite a journey this year, took a bunch of months off, then decided to really rebuild, restructure some of my offerings and bring you, bring the world a new offering of a two-day intensive. So just kind of the thing I've been responding to is the overwhelm.

That I think people are feeling and that really like wanting a human by their side, right? Just answer my question, just tell me how to do it, just show me what that looks like. So to me, that is the a value that I can bring, you know, to the right person, to the person who wants that kind of hand holding to build the business setup that they can find really trustworthy. So I just wrapped my first

Cohort of that, and it was really wonderful. I'm feeling a glow, feeling really happy. everything was actually really pretty smooth. And I think part of that is just like learning that I need to focus and not take on more than I can handle and just do one thing. So putting everything else kind of on the back burner while I built this, including the new software that it runs on, which I built with my husband.

giving it time and also keeping the first cohort really tiny. So there were only four people in it. And I think that really helped me gauge how many questions people have, what the group dynamic feels like, how much I can teach in 90 minutes, how much time we want for implementation time and like troubleshooting time. And so that was just like as a business owner, fascinating. and also really encouraging. So

I don't know where you are in your business, but to me one of the things that I really love about having been in it now for just about ten years is that my cycles go faster now. You know, I kind of know what the big picture pattern is in running a business and like developing a new thing. And so I can kind of like set expectations better, know how long things take and know where I'm gonna need to

iterate and do discovery you know because it's an interactive process you're serving people and people sometimes come back to you and say well this isn't what I want or that's not the price I want to pay or I also want this other thing. and so that's that's just been a little bit of a journey and a good one. A really good one. It feels really good to build something new and then to launch it into the world and see it succeed. So I feel I feel really happy.

I'm curious if you're doing stuff like that in your business, what that looks like. What does that process look like when you get feedback and you realize that it's time to make a change or you have a new offering you want to launch? How do you find that info? what do you do? Do you do lots of client interviews? Do you do experiments? Do you run beta launches and then do a big official launch? Curious to know what your process looks like.

so I thought today because that intensive, my beta launch of the intensive just ended, and I have some learnings from how people received the information and built their business setup, their sort of back end. wanted to come with you with one of the things I've learned that I think can help you have a good takeaway today. So the thing I think I want to leave you with today, or or bring you today, is about.

Understanding your deductions, right? As a business owner, as a self-employed person, as a freelance person, you're considered a business and you are allowed to take any ordinary and necessary deduction you spend money on in your business. Basically, investments in your business are deductible. You don't pay tax on that money, is one of the biggest primary benefits given to.

Freelancers and self-employed people in the US. It's awesome. But what I've found is that a lot of people don't know the rules. They think you need a receipt for everything, which, if there is a receipt, then yes, you need the receipt. But there's actually a lot of really generous things that you're allowed to deduct and that the benefit is really big. and I have come to realize, and I I witnessed this week in my intensive.

That a lot of people are not aware of those rules. And of course, if you're not aware of the rules, you're very much not aware of the documentation requirement of those rules. But the flip side, the corollary, is really nice. Once you learn the rules and the documentation requirement and you set it up so that it's sort of automatically tracking that thing in the background, you no longer actively have to think about it ever again, and you get a much bigger deduction every year.

Right. So it's really wonderful. So I think knowing the tax rules, I realize that a lot of people want to run away screaming, like, my God, I don't want to spend any time on taxes. But this is the value of it, right? Spending a little bit of effort up front to get good systems set up allows you to have these things on autopilot so that you don't have to keep looking at it, right? And so you don't have to feel like you're missing out because you're missing stuff, right?

So this is a big, takeaway. And I want to just bring you kind of the key areas in your business deductions that these are true. Okay. So the big primary ones are places where the thing you get to deduct doesn't give you a receipt. These are the places where, yes, you can have a very generous deduction, but you have to follow a different type of rule, right?

So let's give an example. I think anyone listening probably knows if I get a receipt for a thing that I buy for my business, that I keep the receipt, I track that in my bookkeeping, and that is how I take that deduction, right? So that's gonna be really easy if you buy a thing like my tax guide, right? Taxes for humans, because that is a deductible expense for your business. You're gonna get a receipt for buying that book. You just take that receipt. I don't even

Give physical receipts, they're all electronic. So in this case, that would be something you manage in your inbox, right? So that's pretty straightforward. Where things get trickier are where you are taking a deduction for something that you did for a business purpose as part of something that also has a personal element, right? Because effectively what the IRS wants you to do is to show that you're only taking the business part of the expense as a deduction.

And not the personal part, right? So the key here, the key understanding is separating, is identifying the business portion inside a larger item. Okay? That's kind of the key unlock. And there's several different ways that we do this. That you we have ways to do this in mileage for business trips you do in your family car. We have ways to do this in your home office where you're using a room in your house, but it's dedicated exclusively.

To be used as your home office, your workspace. there's ways to do this with business travel where you might have additional elements of personal pleasure on that trip. And by the way, amen, hallelujah. That's one of the most fun things out there. I will give you some personal examples that are really exciting. I have some trips coming up in the fall.

To give workshops across the country. And I I love doing these, right? So these are business trips. I have to travel to these locations to deliver the workshop I've been hired for. On one of them, I booked a couple nights in Cape Cod and I'm gonna join my friend there, and we're just gonna have a little two person retreat. I'm super excited about it, and I get to basically take this trip that is a little bit personal, a little bit business.

I'm not gonna deduct the whole thing. I'm only gonna deduct the business portion of it. But knowing that I get to deduct the business portion is pretty cool, right? Again, I'm gonna be in New York in October for quite a while actually. I'm giving a workshop with the

Art Students League.

so if you want to come to that, I'll put a link in the show notes. that is open to anyone who wants to come join in Manhattan. I'll be all evening. It's kind of an extended version of my taxes for creatives workshop.

And there's gonna be lots of room to work out how to pay estimated quarterly taxes, you know, all that stuff. So I'm going there for that. I'm also on a panel at a conference. I'm a speaker for a book conference that Farnoosh Torabi is hosting, the Book to Brand conference, which is great. And then I'm going to a retreat. I'm being hired by a foundation to go on a retreat and be a resource to these.

artists who've just gotten a really big grant. and I'm gonna give a presentation and do some one-on-ones. So it's a lot of business spread over two weeks and a weekend. Well, there is a weekend in between, right, where I'm not working. So I invited my mom down and we're gonna get a hotel in New York City and go see art and eat good food and celebrate my mom. And this is one of the pleasures to me of being a business owner is business travel, which I enjoy already on its face.

But also just seeing people that I love, staying in touch with the people in my life I love so much who live far away. So these are things that you can do as well, and I hope you do.

The other area that classically you might use part of an item but not the whole thing are in mixed use items. In accounting, we call these listed property. These are items like, for example, a very fancy camera that you might document your work with or take professional photographs with, but then you also use that camera like to take pictures of your family, right? Or do portraits of friends. That would be a mixed use listed item.

Right, so you can deduct the business portion. You're absolutely allowed to, but there's just rules around how to do that so that you don't take the full deduction for the camera that you're also using in a personal way. your laptop is one of these things, right? You probably use your laptop for most of your work, all of your work, but then you also do a little online shopping and watch some Netflix, right? That means you're not allowed to deduct the full laptop as a business expense.

But you do still get to deduct most of it, right? So these are really important rules to know. They're not difficult to set up, but once you do, it's really empowering because you know that you just have it set up in the background, right? And you never have to think about it again. That's one of the great pleasures of doing this work. So the spirit of the law really is to allow you to genuinely take the full deduction that you're entitled to without overdoing it.

W right, without abusing it. That's all.

This is really good news because a lot of people are missing these deductions, right? Because they didn't realize that they were deductible or they didn't feel comfortable deducting them because they didn't know how to do it properly in a way that the IRS expects and requires, right? This is part of what I teach, part of what I care about.

if you're interested in boning up on your deductions and setting up good systems for them, I have two different methods that I have available to you to do this work, right? One of them is my book, right? Taxes for Humans. That's the sort of lowest cost version. In my book, I talk about all the rules for deductions and how to set that up. Also, if you buy my work and workbook together on my website at sunlighttax.com/book.

I have packaged together a bundle of resources that you get electronically delivered instant access that are really helpful. And one of those several items is a one-hour class on IRS proofing your deductions. So that's my most popular class for good reason, because people know it saves them money and it does. But if you buy my book and workbook as a bundle you get all those.

digital goodies, instant access, you get this deductions class, this IRS proof, your deductions class, where I teach you how to set these things up. So that is another really nice effective way to do that, right? so the book is, you know, $28. The book bundle with the workbook and with that class and a bunch of really amazing other things is $97. just to be transparent. And then the other way of course is my intensive, right? So

In this two-day sunlight tax intensive, setting up your deduction tracking is one element that we do. We actually knock it out in the first hour. And then we spend the rest of our time on the trickier, harder things and really digging into your questions. So that two-day intensive is effectively like me walking you through my book, right? Personally by your side for two full days, plus a one-on-one consult before and a one-on-one consult after to really kind of

address every single personal unique challenge that you're having in your business so that you have it all set up as you walk away. And if you wanted to take a look at that intensive and just see what's see what it's about, send me a DM or an email if you have any questions about it. You can find that at sunlighttax.com/intensive. All right. I have put up some new cohorts that I'm opening for later this fall.

And in the early winter. So if you're interested, but you need a lot of advanced pro planning to be able to take two days of your schedule to get the back end of your business all set up and tightened up. My intention is just to tell you to let you sign up for a cohort much further in advance now that I have things worked out on my end, to let you sign up much further in advance so that you can plan for it. You can plan that timing. Okay. So take a look at that. If you have questions, always let me know.

Send me an Instagram DM @sunlighttax or you can send an email hello@sunlighttax.com. And if you want to do it through the book, sunlighttax.com/book is the less expensive way with less hand holding and walkthrough. So I hope those two resources kind of help you. My intention is for you to walk away from today's episode knowing that there are lots.

Of tax deductions you are fully entitled to in your freelance work, in your self-employment, in your small business, that you might not be taking, that you might not be getting the deduction for because you didn't know one that you were eligible, or two, how to lock it in so the IRS will accept your documentation and never disallow it. That's an unpleasant experience, right? We want to avoid. So those are the ways to get it.

sunlighttax.com/book, sunlighttax.com/intensive, those I will link in the show notes. and I hope this helped you. send me a message. Let me know what's up in your business, what you're working with these days, if you've changed your programming lately, how you do that process. I'm really just curious to just have a conversation about what's going on with you and if you're seeing changes in the world right now that you are making adjustments for.

We are all in this together and I'm here to support you. So please reach out and let me know how I can help. See you next time. Bye!

Can You Deduct That Trip? How Business Meals and Travel Deductions Really Work

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In this episode of the Sunlight Tax podcast, I dive into one of the most essential tax deductions for self-employed individuals, focusing on business meals and travel expenses. If you’re a freelancer, creative professional, or small business owner, this episode will help you understand what truly qualifies as a deductible expense, so you can stay compliant and keep more of what you earn.

I break down IRS rules for business deductions, explain the documentation you need to support your write-offs, and share examples to make these concepts easy to apply. Plus, I talk about why supporting independent bookstores is so important to me and how it ties into the launch of my upcoming book, Taxes for Humans.

Also mentioned in this episode:

01:14 Understanding Business Deductions

08:25 Exploring Business Meals and Travel Deductions

15:20 The Importance of Independent Bookstores

If you enjoyed this episode, please rate, review and share it!
Every review makes a difference by telling Apple or Spotify to show the Sunlight Tax podcast to new audiences.

Links:

Link to pre-order my book, Taxes for Humans: Simplify Your Taxes and Change the World When You’re Self-Employed.

Join my free class: Make Taxes Easier and Stash an Extra $152k in Your Savings

Check out my program, Money Bootcamp

Get your free visual guide to tax deductions

Watch YouTube video version

Don't Forget These Deductions: Parking and Tolls

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Today, I’m chatting about another commonly missed tax deduction for self-employed individuals: parking and tolls. I’m diving into how tolls and parking should be tracked separately and added to the car expense category on tax schedules so you can get the deduction you deserve.

Join me in this episode to get some practical tips on how to easily track your parking and toll expenses for this upcoming tax season. 

Also mentioned in today’s episode: 

• Tracking parking and tolls separately from mileage 2:26

• Methods for tracking car expenses 2:44

• Practical tips for maximizing your deductions 4:30

If you enjoyed this episode, please rate, review and share it! 

Links:

Sunlight episode on tracking mileage deduction 

Save your seat for the free class, Make Taxes Easier and Stash an Extra $152k in Your Savings

Watch YouTube video version

Don't Forget These Deductions: Cell Phone and Internet

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Today, I’m chatting about a commonly missed tax deduction for entrepreneurs: cell phone and internet expenses. I’m going over why these deductions are missed and how you can utilize them to get the most out of your tax return this year. 

Join me in this episode to learn how to calculate a reasonable business percentage for these mixed-use expenses so you can maximize your allowable deductions and keep more of your hard-earned money. 

Also mentioned in today’s episode: 

• Calculating business percentage for cell phone expenses 2:54

• Internet usage and business deductions 5:50

• Tracking and documenting your personal expenses 8:28

If you enjoyed this episode, please rate, review and share it! 

Links: 

Save your seat for the free class, Make Taxes Easier and Stash an Extra $152k in Your Savings

Check out my program, Money Bootcamp.

Watch YouTube video version.

Home Office Expenses on Your Books vs. Taxes

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In today’s episode, I’m chatting about the common confusion around tax deductions for home offices or studios, including what you can and cannot deduct as an entrepreneur. I’m also explaining how discrepancies between bookkeeping and tax deductions for a home office are normal and expected. 

Listen to this episode to get a better understanding of how to maximize your home office and studio deductions. 

Also mentioned in today’s episode: 

• The criteria for home office deductions 2:35

• How you can calculate your home office deductions 6:50

• Direct expenses and quarterly tax payments 8:20

If you enjoyed this episode, please rate, review and share it! 

Links:

 Visual Guide to Tax Deductions

Check out my program, Money Bootcamp.

Watch YouTube video version.