# Taxes for SMBs: How to Pay Less and File Correctly

> A NachoTuesday interview — the C-Suite Insights series from NachoNacho, the B2B SaaS and AI
> marketplace. In conversation with Ada Vaccaro, Senior Director of Partnerships, Bench Accounting.

- **Page:** https://nachonacho.com/nachotuesday/video/Taxes-for-SMBs-How-to-Pay-Less-and-File-Correctly
- **Guest:** Ada Vaccaro, Senior Director of Partnerships, Bench Accounting
- **Guest on LinkedIn:** https://www.linkedin.com/in/ada-vaccaro-she-her-b6701881/
- **Recorded:** 2024-04-25
- **Watch:** https://www.youtube.com/watch?v=UUGygLOGn5c

## Summary

Ada from Bench Accounting introduces their bookkeeping and tax filing service designed to support small business entrepreneurs who are often underserved by traditional accounting firms. Bench provides a dedicated team of human bookkeepers paired with intuitive software to handle the time-consuming task of bookkeeping, freeing up business owners to focus on growth. Adda emphasizes the complexity of the US tax system and highlights common pitfalls and missed deductions for SMB owners, stressing the importance of understanding deadlines, capturing all business expenses (even on personal cards), and correctly categorizing expenses like merchant fees and interest. She also touches on home office deductions and the nuances of deducting business meals. Adda recommends working with a professional to navigate the complexities of tax law and to ensure all eligible deductions and credits, like the R&D tax credit, are claimed. Key Talking Points: Bench Accounting: Bookkeeping and Tax Services Designed for Small Businesses : They offer a human-powered service with software to simplify bookkeeping and tax filing, helping entrepreneurs save time and money. Navigating Tax Season: Awareness of Deadlines and Common Missed Deductions is Crucial : SMB owners need to be mindful of filing deadlines (March 15th for S-Corps/partnerships, April 16th for others), and common oversights include merchant fees, interest paid, and business expenses on personal cards. Professional Guidance is Key to Maximizing Tax Savings and Avoiding Pitfalls : Given the complexity of the US tax code, working with an accountant or a service like Bench is essential to ensure compliance.

## Product discussed

- **Name:** Bench
- **Page:** https://nachonacho.com/product/bench
- **What it is:** Bench is an online bookkeeping service that provides a dedicated bookkeeping team and software to balance your books.
- **NachoNacho deal:** 15% CASHBACK All Plans. 2 Years.
- **Estimated savings:** Save up to $718/year

## Full transcript

Welcome to another NachoTuesday, everyone! Today, I have Adda here from Bench Accounting. Without further ado, we’d love for you to introduce your company and explain what you specialize in. About Bench Accounting (00:34) Absolutely, thanks for having me! We are Bench Accounting, a bookkeeping and tax filing service that supports small business entrepreneurs who are often overlooked by traditional accounting services. Bookkeeping, as a low-margin product, is not typically a priority for most accountants. They often focus on year-end cleanup, leaving you without financial insights throughout the year. At Bench, we believe that no business owner should spend their evenings and weekends poring over bank statements, payroll documents, merchant reports, and countless receipts. Instead, we provide a team of real bookkeepers supported by simple, intuitive software to handle that for you. Importance of Bookkeeping (01:01) That’s a good point because many business owners need to save on operational expenses and understand cash flow but don’t have the time to manage it. This is where a service like ours becomes invaluable. Absolutely. Every entrepreneur I speak to is juggling too many responsibilities, and bookkeeping often falls by the wayside. Knowing your numbers is crucial, but many founders prefer focusing on growth and development rather than managing books. Career Path and Role (01:28) Tell us more about your journey and how you ended up at Bench Accounting. What led you down this path? Absolutely. I lead Partnerships here at Bench Accounting as a Senior Director. I started as an entry-level sales rep with no prior knowledge of sales or the complexities of the US tax system. I recall my first sales call with a lawyer who asked about intricate details of trust accounting. I was initially overwhelmed but managed to learn and adapt. I’ve been with Bench for almost a decade, supporting small business owners with their bookkeeping and tax filing needs. I’m passionate about this space because I can help entrepreneurs—who are the backbone of our society—navigate the complexities of bookkeeping and taxes. Most entrepreneurs don’t start their businesses because they’re excited about these back-office tasks, and many haven’t studied accounting, which affects how they manage their financials. Experience at Bench Accounting (02:57) How many years have you been with Bench Accounting? I’m approaching 10 years with Bench. Wow, 10 years! It sounds like you’re doing great work there. Tax Season Advice (03:30) With tax season approaching, what should SMB owners keep in mind when preparing their taxes? This is a crucial topic. Taxes can feel scary and confusing because the US tax system is intentionally complex. Many people end up paying more in taxes and penalties than necessary, often just to resolve the issue. The IRS, as a revenue-generating organization, benefits from this complexity. It’s not the business owners' fault; the system is designed to be challenging. There are real consequences to mishandling taxes, leading to business owners falling behind or paying more than needed. A few things to keep in mind: Understand Requirements: Know what is expected of you, including which forms to fill out, what to pay, and when. Track Transactions: Ensure you capture every transaction from 2023, even small purchases like an Amazon order for your home office. This can be a deduction. Use Appropriate Tools: Many business owners start with DIY software without knowing much about bookkeeping, which can be overwhelming. Practical Tips for Tax Preparation (05:01) It’s powerful to set up your bookkeeping correctly from the start. Use a credit card that connects directly to your bank account for smooth financial tracking. Avoid paying everything in cash. Also, be aware of important deadlines: For S Corps or Partnerships: The deadline is March 15th. Be realistic about how long it will take to complete your 2023 bookkeeping, whether you’re doing it yourself or outsourcing. For Sole Props or C Corps: The deadline is April 16th. This date also marks the deadline for your quarterly taxes if applicable. If you plan to file an extension, remember that you still need to file the necessary forms. Handling Extensions and Payments (05:58) For those who file for extensions by the March and April deadlines, it's important to note that you still need to make your estimated payments on time. Filing for an extension only pushes back the deadline for filing your tax return, but the payments are still due on either March 15th or April 16th. Common Pitfalls with the IRS (06:32) There are several common pitfalls that businesses often overlook, leading to trouble with the IRS. For example, missed deductions can include merchant fees. If you use platforms like Square, Shopify, Stripe, or Amazon, they often deduct their fees before depositing revenue into your account. This means you only see the net revenue. To ensure you capture the full deduction, download reports from the merchant platform, add up your gross revenue, and record their fees as a separate deductible expense. Another common oversight is interest on loans, lines of credit, or credit cards. This interest is 100% tax-deductible. For instance, if you pay $5,000 to pay down a loan, you should split that transaction into principal and interest payments. Record the interest as a deductible expense on your income statement to reduce your tax liability. Handling Personal Cards and Business Transactions (08:03) Business owners often miss out on deductions from transactions made on personal cards. This can be due to the hassle of downloading and categorizing personal bank statements. However, every dollar spent for business purposes, regardless of the account used, needs to be captured to reduce your tax liability. Deductions for Remote Work (08:33) With the rise of remote work, many companies have moved away from commercial real estate, with teams working from home. There are opportunities to deduct home office expenses, depending on your corporate structure. Work with your accountant to optimize these deductions. You may be able to write off a portion of your utilities and even mortgage payments based on the proportion of your home used for business. Managing Entertainment and Meal Expenses (09:30) For early-stage founders, managing expenses like dinners and entertainment can be tricky. Meals with potential clients are generally 50% tax-deductible. Keep receipts and document who you met with and the purpose of the meeting for audit purposes. Team dinners held in the office are 100% tax-deductible. Work with an accountant to understand how to optimize these expenses to maximize deductions and reduce your tax liability. Best Practices for Filing Taxes (10:58) Regarding tax filing, it’s okay to wait until the last minute as long as you have a plan and are keeping track of deadlines. Besides the federal filing deadlines of March 15th and April 16th, remember to file 1099s by January 31st and W-2s for employees and contractors. Maintain a calendar with all these deadlines and consult with a professional to avoid last-minute scrambles and potential penalties. Recent IRS Developments (12:24) Recent developments in tax law, influenced by changes in presidency and tax structure, can impact different business structures in various ways. It’s essential to consult with an accountant to understand how these changes might affect your business, especially with upcoming elections and potential changes in tax laws. Additional Tips and Exemptions (13:23) When working with an accountant, it's important to ask the right questions. Often, the process can seem opaque as you hand off documents and trust that everything is handled correctly. Schedule a call to gain insights into how your tax return is being prepared and ensure that you are aware of all possible exemptions and deductions that apply to your business. Maximizing Your Return (13:53) Make sure to ask questions about how your accountant or bookkeeper is maximizing your return. Tax season is critical for accountants, and with the current national shortage, it's essential to book a call as soon as possible. If you're working with a bookkeeper, be particularly cautious and inquisitive. Unlike accountants, bookkeepers don’t have formal accreditation, so ensure they are genuinely maximizing your deductions. Ask them about merchant fees, interest collection, and business meal deductions. This will help ensure you're not overpaying on your taxes. If you handle the bookkeeping yourself, it's crucial to stay updated on the U.S. tax code, which spans 7,000 pages. Consider taking training on your DIY software, such as QuickBooks, and ensure that your accountant reviews your books thoroughly to catch all possible deductions. Tax Credits and Programs (15:26) There are various tax credits and programs available, such as the R&D tax credit, which Bench actively promotes to its clients. Another program worth noting is the PPP (Paycheck Protection Program). Many business owners are currently navigating whether they need to repay these funds or not. Speak with an accountant to ensure you're optimizing these opportunities and potentially saving as much money as possible. Personal Recommendations (16:53) Regarding reading, I rely heavily on the Bench blog, where our team of accountants and writers distills complex IRS tax code into understandable material. However, some of my favorite books from the past year include The Talent Code by Daniel Coyle, which explores how practice can build skills and unlock greatness, and The Partner Hacker Handbook by Jared Fuller, which discusses how partnerships impact the revenue ecosystem. Why Choose Bench Accounting (17:50) If you're considering why to choose Bench Accounting, here's why: we provide personal, hands-on support to help you pay the least amount of taxes possible. As the largest bookkeeping service in North America, we have a professional team trained in-house to manage your bookkeeping needs. We even handle tax filings if you don’t have a preferred accountant. If you do, we’ll take care of the bookkeeping and ensure we find every possible deduction. With unlimited access to your team for a flat monthly fee, you can budget easily and receive year-round support. Pricing and Value (18:44) We offer two main plans: plain bookkeeping starts at $299 a month, while bookkeeping and tax filing combined is $499 a month. With just the exemptions and write-offs alone, you’ll save more money than you spend on our services. Future Plans (19:03) Looking ahead, we’re focused on expanding the services we offer to small businesses so that they have everything they need in one place. We already have incredible partnerships with other essential small business functions, like NachoNacho, invoicing with FreshBooks, payroll with Gusto, and banking with Relay. My goal is to ensure that every entrepreneur receives the help they need and the appropriate discounts for each service at the right time to effectively run and grow their business. We also aim to make these services more accessible. There are large communities in the U.S. that have been historically and systematically left behind by financial services, particularly banking. We are on a mission to bridge this gap and reach these communities where they are. (20:01) We have a question from the audience. Lewis asks, “Aren’t contributions to SEP (Simplified Employee Pension) or defined contribution plans tax deductible? If so, what are the limits?” This is a question you should discuss directly with an accountant. Since we’re in the thick of tax season, if you don’t have an accountant already, we’re happy to assist at Bench. If you do have one, make sure to book that call soon. (21:03) It’s been great talking with you about taxes today. As we approach tax season, if you haven’t taken care of your taxes yet, Bench Accounting is here with a professional team ready to help. I can almost guarantee that you’ll save much more on exemptions and get your taxes done right with our service than you would spend on it. Additionally, we offer an extra 15% cashback in the NachoNacho SaaS Marketplace, so definitely check out what Bench Accounting has to offer. Adda, we look forward to our continued partnership. Thank you for joining us today!

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