Q&A: WENDY HSU OF THETAXMUSE
Navigating the world of taxes is one of the most difficult parts of owning your own business. It can be intimidating and confusing, especially when the laws keep changing. There are so many words to learn that it can feel like learning a new language. Wendy of TheTaxMuse is seeking to change all of that.
Wendy is a CPA who spent years working for some of the top tax and accounting firms in the Silicon Valley before starting her own practice. She is passionate about helping creative entrepreneurs understand taxes and make better business decisions. She believes that taxes shouldn’t be a pain point in your business. We met Wendy at a workshop that we attended at Kinfolk Inspired Space, and both learned a lot from her. We are excited to introduce you to her! Make sure to follow along on her Instagram to get helpful tax tips throughout the year.
Tell us a little about who you are, how you started your company, and what your specialty is.
Hi, I’m Wendy! I have a tax and consulting practice where I specialize in working with small business owners and entrepreneurs in the creative industry. Before starting my own business, I spent over 10 years working at the top tax and accounting firms in the heart of Silicon Valley. Although I loved the high-paced environment and my brilliant colleagues, I found myself wanting to explore different avenues to combine my profession with my other passions and create something to call my own.
I wasn’t sure what to pursue at first, but building a client base was necessary so that I could at least support myself financially. It’s been a little over a year and a half now and I’m so grateful for the opportunity to work with each and every one of my amazing clients.
During this time, I’ve spoken to so many small business owners who aren’t yet at a stage where they can afford to hire someone and are simultaneously struggling with their taxes and accounting, when all they needed was some guidance to make their lives that much easier. That’s what led me to start my Instagram account, @thetaxmuse: to provide weekly tax and accounting tips in a way that’s easy to digest and tailored specifically for the creative community.
What services do you offer to your clients?
I find that the first thing that comes to people’s minds when I say I’m a CPA or accountant is that I do tax returns – which I do – but that’s only one of the services I offer. When running a small business, taxes and accounting shouldn’t be (and isn’t) a one time thing a year, which is why I work closely with my clients throughout the year in a consulting/advisory capacity. I help them understand tax implications and provide accounting insights so they can focus on building their business and make better business decisions. This includes bookkeeping reviews, providing accounting recommendations, identifying potential issues or more tax advantageous opportunities, running tax projections for cash planning, and the compliance filing obligation needs of the business such as sales tax, payroll tax, and income tax returns.
What made you decide to work with creative businesses?
I’ve always enjoyed anything that had a creative element to it – whether that’s photography, styling, fashion, arts and crafts – so I’d say it was more of a gravitation towards the industry rather than a deliberate decision. I’m also inspired by the passion and heart behind creative entrepreneurs where their businesses weren’t necessarily started with the purpose of making money, but as a result of their passion or mission.
While taxes and accounting are two of the foundations of building a successful small business, these are also two of the most neglected aspects of creative businesses. This is an area where I can add value and help creatives sustain and grow their business. Plus, creative businesses always have pretty things to look at, so when I need a break from looking at numbers I can always look through their instagram and feel inspired all over again.
What has been the biggest creative or business challenge you have faced, and how did you overcome it?
As an introverted person, one of my biggest business challenges is marketing myself and putting myself out there. My heart is always saying “no,” but my mind says “just do it!”. I know it’s something I need to feel comfortable with in order to grow my business, so I force myself to do at least one uncomfortable thing a month. For me, this can include posting something personal about myself on social media, or things like accepting speaking invitations.
How do you manage so many accounts at once and stay organized?
A lot of checklists! I also use apps like Asana to manage timelines and making sure my projects are moving forward. I also use Todoist for keeping track of daily tasks.
If someone is thinking about starting a business, what are some things they should consider in regards to accounting?
Accounting might be the last thing someone wants to think about when starting a business, but it’s critical. I truly believe that it’s one of the foundations of successful small businesses because among other things, it provides valuable insights to your business and helps you make better business decisions. It sounds serious and intimidating for most new business owners but it really isn’t when you break it down: The core of accounting is bookkeeping, and at a basic level bookkeeping merely consists of tracking and categorizing income & expenses. Developing a habit of timely bookkeeping is the best way to be able to see and track what’s going on with your business at any point in time from a financial perspective.
What tools, or resources would you recommend to entrepreneurs who are just getting started with bookkeeping or accounting?
I highly recommend using an online bookkeeping software (like Quickbooks or Xero) to help you with your bookkeeping. Bookkeeping software allows you to link up your bank accounts so that transactions through your bank are automatically imported into the software for you to review and categorize.
The key to making tax time less stressful is to make sure you develop a habit of bookkeeping throughout the year, rather than sorting through a year’s worth of transactions when you’re trying to file your taxes. I recommend new business owners dedicate at least an hour once a month (or more frequently, if needed) for bookkeeping and organizing tax documents. A little each month will really save you a lot of time and reduce your stress and anxiety at tax time.
What are some things that business owners can do throughout the year to stay organized and prepared for taxes?
One basic thing that every business needs is a tax folder - whether this is a physical folder you keep in your home office or a folder you keep in the cloud - you should have a file started for each tax year where you can put all your tax receipts, tax documents, and important-looking tax records that come your way throughout the year. Even if you don’t have time to organize everything, having all tax-related info contained in one place will reduce the time you spend hunting down the info later.
What is the number one piece of tax advice you would share with an entrepreneur?
As a new business owner, you’ll need to put in effort to understand the tax basics and obligations as it applies to your business. Tax laws are complicated, and you’re not expected to know everything: That’s why there are tax professionals. However, until you’re at a point where you can hire someone to help deal with taxes and accounting, you’ll have to spend some time to understand your compliance requirements so you don’t put the efforts you’ve expended on building your business at risk.
That being said, the tax authorities know it’s hard for small business owners to do everything correctly, so unless you’re willfully evading taxes they’re not going to be sending you to jail for making a mistake – you may just have penalties and interest to pay. So my advice for new business owners is to try your best but don’t let taxes stress you out to a point where it holds you back from doing what you need to do to build and grow your business.
If you could only listen to one song for the rest of your life, what would it be?
I can’t pick just one to listen to! I listen to very different genres depending on what I’m doing. When I’m doing taxes, it has to be classical piano solos (keeps me relaxed and focused). On chill weekend afternoons, I’m into Bossa Nova or any Hotel Costes soundtrack. I’ll also never get sick of 90s pop - It’s a Friday afternoon and I’m listening to Spice Up Your Life by the Spice Girls!
Any more advice or anything else you would like to share?
Dealing with taxes and accounting is hard when you’re in the early stages of running your business, and it only gets more complicated as your business grows. When you own your business, there's so much more beyond just filing your taxes once a year – it’s a year-round process consisting of bookkeeping, sales tax, payroll tax, quarterly estimated taxes, and all the nuances that surround it – which is why it’s important to have resources to turn to when you run into situations where you need help.
If you need guidance, don’t hesitate to reach out or DM me through IG @thetaxmuse – although I might not always be able to answer each person’s questions directly, my goal is to try to post about topics that I get the most questions on - so your questions will help me make sure my posts are relevant and helpful for the creative community.
I’m also currently working on a project called The Tax Collective. My goal with this is to help build a community of small business owners who can work together to navigate the complexities of taxes and accounting in a collaborative online space. Head to: www.thetaxcollective.com if you’re interested!
There's so much more that I want to do to help support the creative community, and I’m really looking forward to sharing more tax and accounting resources and tools with you all this coming year!
If you're in the SF Bay Area, I'm hosting a tax workshop for creative small business owners on 2/16. This will be an in-depth interactive workshop where I’ll guide you through everything you need to know in order to successfully get your taxes filed for this year. Click here for full workshop details: https://www.thetaxmuse.com/tax-workshop-2019
Thank you Wendy!
You can check out all of our past Q&A’s here.
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