All of us, from single taxpayers to business owners, could probably use a tax coach. Are we paying too much, or too little? What actually counts as a deductible and just what is an LLC, anyway? Barbara Schreihans, founder & CEO of Your Tax Coach, a boutique tax accountancy & tax strategy firm, has made a lucrative career out of answering these questions. In just a few years, Schreihans grew Your Tax Coach from a side hustle into a firm featured in Forbes, Entrepreneur, The Rich Equation and many other magazines, podcasts & media outlets. She shared tax tips, money management strategies and the origins of her highly successful company with Taylor Burke, host of Vagaro’s On Point podcast.
From Tax Fog to Tax Coach: Schreihans’ Story
Barbara Schreihans’ firm, Your Tax Coach, helps many businesses and high-net-worth individuals across the United States manage their finances and maximize their profits. It’s easy to imagine Schreihans, being taught how to save money and build wealth from an early age.
In fact, the opposite was true.
The specters of foreclosure, crushing credit card debt and bankruptcy were ever-present in her childhood, and made growing up difficult. In a sense, Schreihans’ parents taught her the importance of financial literacy and fiscal responsibility by modeling what not to do.
“Even from a young age, I knew that things should be different than they were,” she said.
Schreihans vowed to make a different life for herself, but it wasn’t easy. She became pregnant with her first child during her junior year of college. On top of this, she had to finance her entire education by borrowing student loans. This put her, like so many people, in serious debt after graduation.
Tax Coaches, Not Just Accountants
Schreihans spent 10 years grinding in the accounting industry, including a successful tenure with a well-known Big Four accounting firm. She put in long hours and earned a lot of money for her employer, but not nearly as much for herself. She grew increasingly frustrated.
Something else gnawed at her, too. After reading many books about money management, investing and how successful people build wealth, she finally realized what it was.
“These companies aren’t actually helping people with their taxes, coaching or consulting them,” Schreihans said.
That, Schreihans decided, is exactly what she would do.
Today, her debts are paid off. Schreihans has the life she imagined for her and her family, and the job of her dreams helping people & businesses navigate taxes, prepare for retirement and grow their wealth.
Below are some tips, tricks and insights that have helped both her and her clients.
(Listen to On Point for more of Schreihans’ story, her favorite books and apps for money management, and the incident that finally made her decide to leave the corporate accounting world and start Your tax Coach!)
Tax Tips for Businesses
Schreihans knows from personal experience how important tax literacy is to financial health, which is, in turn, important for individuals and businesses to thrive.
Business owners stand to save the most in taxes, according to Schreihans.
“The internal revenue code really is there to benefit you,” she said.
Schreihans pointed out that there are thousands of pages in the United States Internal Revenue Code focused on how business owners should and should not pay taxes. She suggests that people familiarize themselves and use these rules to their advantage.
In fact, cracking the Internal Revenue Code, so to speak, is something that Your Tax Coach does for their business-owning clients. Schreihans and her associates first help clients legally structure their businesses based on their goals, profits and other factors to take full advantage of their tax benefits.
These structures include:
Sole Proprietorships
Businesses that can be owned and controlled by an individual, a company or a limited liability partnership. With sole proprietorship, you do not pay separate business taxes.
LLC (Limited Liability Company)
An LLC (Limited Liability Company) is a business structure that offers limited liability protection and pass-through taxation. As with corporations, the LLC legally exists as a separate entity from its owners. This means that owners are protected from personal responsibility for the company’s debts or liabilities.
S-Corps
An S Corp, or S Corporation, is a business structure that is allowed under the tax code to pass its taxable income, credits, deductions, and losses directly to its shareholders. Pass-through entities pay no corporate taxes but instead pay their shareholders, who handle the taxes due.
C-Corps
A C Corp, or C Corporation, is a legal structure for a corporation in which the owners, or shareholders, are taxed separately from the business. C corporations are the most common and are subject to corporate income taxation.
After this, Schreihans and the Your Tax Coach team help their clients find as many legal tax write-offs as possible—and there are many possibilities. This is a service that tax strategists will provide that a traditional accountant probably will not.
“We help you figure out how to make something work, whereas most accountants typically tell you what you can’t do,” she said.
(How do you write off travel as a business expense? Do some companies invest their tax money into high-yield savings accounts instead and pay a penalty later? Schreihans answers these questions on the full episode of On Point!)
Tax Tips for Individuals
For individuals, there may be more to consider than just filling out basic info in the 1040 or 1099-K. While single W2 earners don’t benefit as much as business owners do from taxes, Schreihans offered some tips for them as well:
Max out Your 401K
The current max annual contribution to a person’s 401K is $22,500, though that number increases over time. This number includes an individual’s contribution and what their employer might match.
Open an HSA
A Health Savings Account uses untaxed dollars to pay for deductibles, copayments, coinsurance, and some other health expenses. Saving all or most of it each year lets you pile up a significant, tax-exempt addition to your retirement savings.
Open an FSA
A Flexible Spending Account allows you to contribute a portion of your regular earnings to pay for health-related costs and isn’t subject to income and payroll taxes. A dependent care FSA can be used for other things, like childcare services.
Open an IRA
Schreihans is a big proponent of IRAs (Independent Retirement Accounts) and believes that everyone should have one. It is never too early to start saving. “You’ve got the money; start saving,” she said.
(What’s the difference between a traditional IRA and a Roth IRA? What do banks do with the money we put into high-yield savings accounts, and when is the best time to start investing? Listen to On Point for the answers to these questions!)
Busting Common Money Myths
Schreihans believes that there are some commonly held beliefs about money that are myopic and self-limiting. They can negatively affect our relationship to money and finances by coloring it with fear, anxiety and confusion.
A few phrases Schreihans finds problematic:
“Money is the Root of All Evil”
In Schreihans’ experience, those who have the most money give the most back—and understand the value of it in helping people and institutions.
“Money Can’t Buy Happiness”
While money itself cannot make you happy, Schreihans maintains that it affords you stability, ease and freedom from various stresses—all keys to achieving a happy life.
“I Can’t Afford That”
This sounds like a responsible thing to say—at first. By repeating this as a mantra, you may be internalizing that you don’t deserve something (or many things). It can also cause worry and anxiety about money itself. This is especially true with children, Schreihans says.
(Our relationship to money & finances begins as children. Listen to the full episode of On Point for Schreihans’ tips on how parents should frame money-related subjects when speaking to their kids.)
Schreihans and the Your Tax Coach crew helping people foster better relationships with taxes, finance and investing.
Her one major piece of advice for individuals and business owners alike?
“When it comes to taxes and money, don’t put it off,” she said. “The more often you look at your money and where it is going, the more you’ll save—and the more you’ll make.”
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Taxes don’t have to be a quagmire for business owners and individuals, as Schreihans proves. Listen to the entire On Point podcast to hear more about Schreihans’ story and get more tax, money-saving & investing tips. Meanwhile, do some research of your own. Increasing your tax and financial literacy will only empower you as a business owner.
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