30 Mar Ep. #118 Money March Ep. 5 – Meet my Bookkeeper Michelle De Castro (a.k.a. Money Michelle)
Michelle De Castro (or Money Michelle as listeners know her) joins me on the podcast today, and YES we definitely talk MONEY. Michelle is my personal bookkeeper and personal superhero when it comes to tax time. As the USA is gearing up for tax season on April 18th, Michelle gives us her best tips on tackling taxes and even some advice on getting a head start for tax season next year!
How does a creative person tackle tax categories? What can be written off as an expense? Can I bake my cake and eat it too? Find your answer here by clicking play!
Prepping for taxes? Head over to thedanawilson.com/shop to download a worksheet for this episode! This worksheet will be your guide in all things expenses.
🔥Here are three reasons why you should listen to the full episode:
- You’ll find that creative people can have creative problems when it comes to tax time and it’s good to know what those problems can be
- You’ll learn if you should mix pleasure with business expenses or leave them seperate
- You’ll start to create a plan to give yourself a head start (and less of a headache) on next year’s taxes!
- WTMM Membership Join Here:https://thedanawilson.com/wtmmcomm
- Need help managing your money? You can find Michelle www.delegatedbookkeeping.com or email her at firstname.lastname@example.org
- Looking for a new money keeping software? Try quickbooks
✒️ Powerful Quote from This Episode
[10:38] “The best way to get something done is to start.”
🕺About Michelle De Castro
Michelle De Castro is a virtual, certified bookkeeper with over 15 years of experience in the field. She works with small business owners in the Greater Los Angeles area and other areas in California, helping them keep their finances organized by categorizing business transactions, reconciling bank and credit card accounts, and providing financial reports for their company. Her number one goal is to make sure your financial records and reports are prepared and ready for tax-season.
[4:54] Meet Michelle De Castro
[8:21] The Biggest Mistakes When It Comes To Taxes
[10:15] What Should My Expense Categories Be?
[13:39] What’s The Best Tools For Tax Season
[15:30] Expense Categories For Self-Employed People
[20:57] What You SHOULDN’T Do
[28:23] Mentally Preparing For Taxes
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Keep It Funky!
Intro: Welcome to Words That Move Me, the podcast where movers and shakers, like you, get the information and inspiration you need to navigate your creative career with clarity and confidence. I am your host, Dana Wilson, and I move people. I am all about the tools and techniques that empower tomorrow’s leaders to make the work of their dreams and live a full life while doing it. So whether you’re new to the game or transitioning to your next echelon of greatness, you’re in the right place.
Dana: All right. All right. My friends today is a big one. This is the last episode of money march, 2022. And it is coming at a perfect time. The time where your individual tax returns are due in about a month, less than a month, um, that due date is approaching. And I have some very helpful insights today from the one and only Michelle de Castro, AKA money, Michelle.
She is my bookkeeper and so uh, this was the first time we ever spoke this at length about what it is that she does. Um, the helpful hints, the do’s and don’ts, and honestly much, much more. I am stoked that you are here. I am excited to share, but first let’s do wins. We start every episode with wins here on the podcast. And today I am celebrating a type of overwhelm that I have not felt in a very, very long time. And that is the type of overwhelm that comes along with there being too many fun things to do in one weekend. And you actually have to decide that you can’t do everything so you have to not do some things. Um, yeah, this, this seems like my social life is coming back after a long hibernation phase. Are you with me? Are you feeling it also? How are you dealing with it? Um, I personally am taking the plunge minimum two social events per day, Friday, Saturday, and Sunday. This weekend, riveting. That is what I’m celebrating. Um, how about you? What’s going well in your world.
All right. Congratulations. I am proud of you. I am cheering from a distance. All right. Now let’s talk about money from a distance. All right. I am so excited to introduce you to one of the most important people in my money world. One of the most important pieces of my money machine, um, this, this is my bookkeeper money, Michelle. This is Michelle de Castro. Um, now don’t forget to head over to thedanawilson.com/shop to purchase the interactive PDFs that accompany every single episode of money March. And we’ve covered a lot. Y’all this is not the, the amount of stuff you can keep in your nugget, all at the ready all at one time, it really does help to have it in pen or in pixel, if you will, if that is your jam. Um, so go snag those money, March PDF podcast, companion worksheet, do dads. And, um, yeah, if you’re a listener and to do kind of person, if that’s really what it takes to apply the knowledge, I strongly strongly recommend that. Okay. Speaking of apply the knowledge, let’s get into it. Let’s talk bookkeeping, let’s talk taxes, and let’s talk, managing your mind around both of those things with Michelle to Castro. Enjoy.
Dana: All right. My friends. Welcome. Welcome to Michele to Castro. A lot of you who’ve been listening to the podcast for a long time, know Michelle as the one and only money Michelle, because she’s, uh, a key part of my money machine. Um, but Michelle, your name is not actually money. Michelle. Do, does anyone else call you that or is it
Michelle: No, it’s just you.
Dana: Okay. I will then yield the floor and let you introduce yourself. Tell us anything you’d like us to know about you.
Michelle: All right. Well, thank you for having me here. I’m so excited. Um, my name is Michelle and I am a bookkeeper and I’ve been in the accounting world for about 18 years now. And I work with small businesses and freelancers to keep their finances organized and to help them gain a better understanding of their financial position and what they like the most is having reports ready for tax time. And more importantly, um, I am a wife to an amazing husband and a mother to two wonderful daughters,
Ah, who are the same ages as my nieces. And we just connected on, um, eight, eight to 40 year old, uh, entertainment. Um, all of the Encanto, all of the frozen At the time.
Okay. So 18 years, that is a long time. I’m curious about if you’ve always been a math numbers person, what was it that got you into being a financial person?
I have actually always been a math person. Like I remember like, I think it’s kindergarten or even first grade I was into doing my math homework. Like, it was fun for me and I wouldn’t even tell my cousin like, give me yours. Like I wanted to. And so I was always into math, like all throughout middle school, high school, even in college so much so that I didn’t always know I was going to go into accounting though. I, um, when I was into math, I was thinking I was also into computer. So I was almost leaning towards engineering. And then I got my first job at 17, um, in an accounting department. And then that’s when I was like, everything clicks here, everything makes sense here. So, and that’s how I got started into the accounting world.
Ooh, well, at least everything clicks and everything makes sense if you’re doing it right. All the numbers add up when you’re, when you’re doing it. Right. Yeah. Um, okay. That tracks, I, I knew of those people, those math people, when I was in school, I was not one of them, but, um, I guess it makes sense. It really does. Uh, okay. So I don’t want to, I don’t want to, I don’t want to put a wedge between us here, Michelle, but I do want to learn from you about myself and people like me. I would love to hear about kind of the biggest mistakes that I make or that people make, um, who are trying to organize their finances. And if you could keep a specific focus on people who are self-employed or people who might be single member businesses or small business, like maybe a few employee types, because I know a lot of the people listening are dancers and choreographers, people who work in the entertainment industry, who I like to think of as snowflakes and maybe, and maybe that’s all you work with. So maybe we’re all the same to you, but in my mind, like the intervals in which I get paid, vary the amounts, I get paid, very, the people who pay me very, I think, I think there’s a lot that’s unique about us. Um, so yeah, well, I am talking myself in circles. Let’s round it out. What are the biggest mistakes that snowflakes like me make?
Well, I think one of the biggest mistake is letting it be a hurdle and just overthinking it and just getting overwhelmed and not even starting. So the best way to get something done is to start. Um, I think like one of the most helpful things is, you know, creating like a separate bank account just for like anything business related. Cause then, you know, what people tend to do is just leave everything until it’s tax time and then scramble and try to figure things out at the last minute. And when you do that, you just stress yourself out and overwhelm yourself even more than you would have. If you just taken the time to start sooner,
Yes, starting very important. Yes. Separate bank account. Totally important. Yes. But even so like I have my business account and then my normal human life expenses account and even so we, every single month categorize expenses, make sure that the, um, things that I am, that I am trying to deduct are fully deductible, like meals, not all meals are fully deductible. Can we take a moment to have a conversation about expense categories? And is there I, there probably isn’t is there a one size fits all for people like me, independent contractors or self-employed people working in entertainment? That’s like this category, you should have this category, you should have this category. You should have this category. Um, have you, have you figured that out? Have we figured that out? Cause I feel like we still haven’t figured that out.
Well, I think, um, in regards to expense categories, it has to, it doesn’t have to match exactly like what’s on a tax return and I think that’s what, um, some people try to do and what actually stresses them out and it doesn’t have to match. And so when you think of expense categories, it should be meaningful to you and your business. And so if you need to create a new expense for a different category, that’s fine. As long as it’s meaningful, like if it’s like, you’re only gonna spend $20 on that certain expense for the whole year, it wouldn’t be meaningful to create a separate expense category for that. So that could fit into something else, but just making sure it’s meaningful to your business and then come tax time, you talk to your, your tax accountant and he will be actually, or he, or she will be the one to tell you, like, for example, meals, you’ll put it at full a hundred percent on your profit and loss. And he’ll be the one to make that 50% deduction on the tax return
or, well actually how would they know? So one thing I learned this year is that the only meals that are 100% deductible, I think in my world would be like an overtime situation where I decide to feed my employees. Like everybody’s still here and I decide to feed them. That would be 100% deductible, but like, you know, craft services for this shoot. Totally not. Well actually no craft services would be, do you see what I mean? I’m getting like, cause food is food, but meals, professional meals, aren’t all created equal in the eyes of the fed. So
Well, um, so if you have meals with clients, for sure those are 50% deductible. So they would just go into a regular meals category. But if you do have something that’s like, if you have like an employee party, that’s a hundred percent deductible, we would want to create a separate meal category to make sure that accountant knows that that’s not a regular business meal with a client it’s a business meal for a holiday party or employee appreciation party that should be, Yeah. Well, and then if you have specific questions like that, you can always go to your tax preparer. Cause he’s very knowledgeable.
Um, Michelle and I share a CPA, his name is Jeremy. And so that’s, she’s giving me the eyes like talking to Jeremy about that one. Um, but that’s w I think what your underlying underlining for me is this notion that certain expenses will almost always be case by case. And so it helps, it helps to have a relationship with your bookkeeper and with your CPA that allows you to not just once a year, but maybe once a month, maybe this will be a good point to pause, actually, an ask you kind of what it is that you do for me. Like, all I know is that once a month I get an email from you and you’re like, what was this? What was this? What was this? And I tell you, and then I get a report. So what’s going on behind the, behind the curtain. There
That’s the gist of it, but yes, I’ll go through. Um, cause we use an accounting software QuickBooks, which makes everything so much easier than if I had to do everything on a spreadsheet, for example, but
Right. I’m a fan. I’ve enjoyed it.
Yeah. It makes things a lot easier and we can both access it. Um, so it’ll download your bank transactions and I’ll go through it. And most of the time things are pretty, um, recurring. So, you know, they’ll, they’ll go into the same expense categories month after month, if anything is different or it looks unique, then that’s when I’ll ask you, like, what was this? So I can put it in the right expense category. And then after that, you know, I’ll reconcile your accounts to make sure everything lines up with the bank. We didn’t miss anything. Nothing was missed when it was downloaded. Um, and then I’ll give you your financial report at the end of the month, which will be your profit and loss and your balance sheet. And you know, if you have any invoices that are pending payments,
Ooh, yes. So helpful to know the ins and outs in terms of money. And I love looking at those reports cause it is, it’s so clean and it’s so clear if something’s missing, I can tell. But for the most part, I just get to see, I don’t know this isn’t a technical term, but like the red and the green what’s going out, what’s coming in and it’s it’s to do that at least once a month, I think is really it’s important for me is it helps me spend with confidence. It helps me save deliberately. I really, I love that once a month, a moment, that particular once a month moment. Um, okay. So what do you think? What do you think everybody in my situation, and I know it’s, there’s no like one size fits all, but do you think everybody should be using a financial software? Do you think everybody should, you know, categorize and consolidate once a month? What are your recommendations for self-employed people?
I do think that’s a very smart move. It just makes things easier and you don’t have, like, it saves time. That’s like the biggest part. It saves a lot of time and you won’t get that overwhelming feeling because, you know, and if you do it once a month, like you’ll have that system and it won’t be like, it’s not as draining, cause it’s like a routine now, but also, you know, like you take the time to look at your profit and loss statement, the ins and the outs. And that’s important too, because you can see like, oh, is this where I thought I was going. If it’s not, then you, you got to figure out what can I do to get back into the path that I want to take.
Okay. So our, our system worked a little bit like this. We met, I was like, please be my bookkeeper. You were like, okay, fine. Get QuickBooks office. Add me as an admin connect, your bank accounts, toggle, you know, like create rules for certain expenses, as you mentioned, like, um, my Peloton membership goes under, uh, training or maintenance. I can’t remember like personal body upkeep something. Uh, we made rules for my existing or for my recurring expenses. So those always get categorized in the same place. And then you monthly take a look at, at those reports. You ask me about anything that looks odd or doesn’t have a category. Um, then you put it where it needs to go send me the report. I stay on track of where I am and where I want to go. And that’s sort of how we operate. Is that, is that pretty typical or is there, are there other things that you do for other people that work well? Are there things that we do that not everybody gets to have,
That is the most typical, um, situation. There are like other people, um, that, you know, I’ll do like a monthly comparison, like in comparison to last month, like it, your sales went up or your sales to went down, um, or your expenses or way higher than last month. And, and if, you know, if they want, like, we can do a comparison to the same month from the previous year, because sometimes things are seasonal. So, and just comparing those. Yeah.
See, I am not a math person. I’m not necessarily a numbers person, but I am a competitive person. So when you make this about comparison or like, you know, how, how one thing stacks up to another that interests me, which I also know is an option in, in QuickBooks. I can look at overviews. I know, I think I know how to compare months in there, but yeah, I really enjoyed that software. This is not an ad for QuickBooks office. No, actually there are several things they can do better, but I, I dig that. Um, are there any things that you wish all of your clients did like probably respond to your emails right away?Sorry about that
Um, well, yeah, definitely that there are times I have to follow up and that’s okay. Like I know that everyone’s busy and they have their own business to run and that’s one of the reasons they have me in the first place. But, um, just, um, going back to looking at your profit and loss, I really wish, I don’t think that everyone looks at their profit and loss. I don’t think everyone looks at the numbers. And I think it’s really good idea to just look at it because then, you know, if you just do it for tax time, then you might be surprised like, oh, this is what it was all year. But if you’re looking at it on a periodic basis, then you just have a better track of what’s happening during the year. And then you can just make a plan. You know, I tend to make a plan for like how I see the whole year is going to go. And then every month I can make a comparison like, oh, okay, this month we’re on track this month. We’re not on track. And then you can, the next month, it may need to do a little, something else. Might need to change it up.
I think that’s very wise advice. Um, start like start doing it. Number one. And then number two, keep looking at it as you’re going. Just keep looking at it. Um, I, it sounds over simplified, but I know because I’ve been there that actually matters so much, seeing the number, registering the number, changes your behavior down the road. If you really have no idea what those ins and outs are, you’re likely to continue operating at a certain way when you might have operated differently, knowing all the inf having all the information. And I don’t just mean like you would spend less in, or you would be more thrifty or save more. In some cases, if I knew how much, if I knew how much I was making, I might take more vacations. I might say no to the gigs that don’t serve me. I might be. Yeah. I really do think your behavior changes when you know that the greens and the reds of it. I think that’s so important. Um, okay. So I have to ask then on the flip side of that coin, is there anything you wish your clients would never do? Like what peeves you to no end
When there’s just a mixture of personal and business expenses together, that’s just
Unforgivable all this brings us back to having separate accounts.
Yes, yes. Um, yeah. Cause when they do, when you do co-mingle and you are incorporated, that’s a problem because then you’re piercing that corporate veil, but also it just makes things this organized and it defeats the purpose of, you know, trying to be organized financially.
Are there any items I have to ask that could be considered both? Or what are those items that people should look out for and really be sure that they put in one place or another or on one card or another, I should say,
Well, I’ve seen some expenses, like for pets, like pet care, like that’s definitely not business related. So then, or like, you know, it depends on the industry too because, um, you know, with entertainment or there’s certain expenses that are deductible for you, but it’s not exactly ordinary for another business.
Um, manicures, for example, I’ve had three self-tapes in the last month where you had to show your hands as part of the, uh, you show front and backs of hands. And I just got to a place where I was like, I really need to get that handled. So for me, a manicure is a professional write-off. Um, but for other people it would be, uh, a personal, a luxury thing.
What else, what else am I missing? Obviously I deduct my gym memberships as well. Those are things that people, a regular old Joe would have on their personal expenses, but mine is a business expense going to see movies, especially if it’s a director that I want to work with, or if it’s a musical, if it’s anything at all related to dance movement, direction like, or an even an actor or a department head that I want to work with, I am definitely writing off, going to see movies. Um, and therefore some of my subscription services as well, my Netflix, my things like that. Um, and that seems to be all, all green light from, from Jeremy CPA. And, um, as I mentioned, kind of the personal maintenance stuff, makeup for me is, is a part of being on camera. It’s a part of being on stage.
Um, haircuts definitely fit into that. Massages for me are not a relaxing thing. They are a painful thing and they are an essential thing. So I definitely write off massages and skin treatments, stuff like that. Um, wardrobe is tough and that’s, I don’t know I’ve, this is probably more of a Jeremy question, more of a CPA question, but I’ve heard mixed things about like, if I, uh, man, this is tough. Most of the dance clothes that I wear these days as a 35 something, um, are human clothes that are dance apple. They’re not a uniform specifically. They’re not spandex always. They’re not like branded dance attire. They’re normal person clothes that I buy knowing I’m going to sweat it out, but I have to look like a normal person dancing for this submission. Or I have to, you know, feel a certain way before I put myself on camera or I have to, you know, want to want to look a certain way as I go take class or go network or go audition for things. So I have heard mixed things about whether or not you can fully write off a peril that isn’t fully used for that thing. Like for example, this shirt, I just wore for a self-tape, but I will wear it out to dinner tonight and I will wear it on a date some other night and I will wear it. Like it is not an exclusively that thing. So I think there is some gray area there, but I don’t know. Is that a Jeremy? That’s a Jeremy, isn’t it?
Yeah. Well, yeah, it is, it is a Jeremy thing. So, but you’re right. Like if you’re going to be able to use it outside of like whatever production then typically it’s not yeah.
Well could I split that expense then? Could I say that this is 50% professional and 50% personal?
That would be a Jeremy question.
And it would be a question that would annoy you. It would be a thing that would show up on my monthly questions from Michelle that I’d be like, well that one’s half and half. Dang it. Wilson. Just split it up, keep it clean.
Um, I get it. I think that part of being maybe, Hmm, I think one of the perks of being a person who gets to do what you love means that there will be some extra work for you to do, to keep it clean and repeatable, you know? And I think I keep trying to make every tax season better than the last one, learning about what meals are expendable and what meals aren’t, it’s just something I keep having to relearn. Um, knowing, knowing whether or not my business pays my individual for my house dance studio or what I’m trying to say is there are several things that no matter how many times I learned them, when tax season comes around, I will still get a little bit confused. One of those things is the categories like which goes, where, which wait, did I say that crafty was this? Or did I say that crafty was that I, you know, that’s one of them, um, space, you know, how much of my house do I use for work? That’s another one that I get confused about sometimes. Um, what are the things that are, are there any things that you remember me always asking you? Like, what are the things I always ask?
Well, first I want to like back up and say, it’s not your fault that, you know, come tax time. You have to like relearn these things because tax rules are constantly changing also, especially in the last two years and even meals, there’s been some changes in the last year or two. So of course I myself, like, that’s why I like stop at being a bookkeeper and I let the tax prepare be the tax prepare because then they have to it’s their job to like relearn all those things.
Yeah. That doesn’t seem fun to me at all. Even if I was a numbers person, I don’t think I’d be a tax person.
Yeah. Especially the last two years I give them so much credit. It’s been wild for sure. For a lot of people. Yeah. Um,
Okay. Well, it is, it is now March. So we are like in the thick of tax time, I have already filed an extension. Any, any final tips, tricks, or words of wisdom or even thoughts like it, I, you, you’re putting some emphasis on like, don’t get frustrated, don’t be overwhelmed. Don’t be afraid. Like it’s, it’s, it’s going to be okay. I do think that the mental part, the mental component is so important. Um, yeah. Yeah. What would you say to people that are grinding right now, prepping for taxes?
Well, I would just, you know, go back to starting. That’s a good start. And then if you need help, you know, it find someone that can help you cause then it makes it easier. And um, yeah, just, just start, just start don’t don’t just set aside, maybe like set aside some time, like, okay, on this day I’m going to spend, if it’s just 15 minutes, you want to spend, just do it for 15 minutes and then just stop and then just set aside another time and just tackle it like a little bit at a time. And I think that could be helpful instead of just, you know, maybe like dragging on for an hour and just hating it. 15 minutes is a short amount of time.
Yes. A woman after my own heart, put it on the calendar and just do it.
Even in small bites that is encouraging. Thank you so much. Um, yeah, Michelle, I think that is all of the questions that I wanted to ask other than just like, how do I become filthy, filthy rich and not hate doing taxes? I don’t, I don’t know that there are clean cut answers to those questions
Me either. If you find them let me know
When the lottery and find somebody else to do your taxes. Yeah. We’ll start there. Um, all right, Michelle, thank you very, very much for here. I so appreciate your, your thoughts, your time, your talent, and working together as a dream. Um, could you please let people know where to find you if they’re, if they’re in that tax crunch right now and they’re like, I’ve got to delegate, I need a team please help. Where do they find you?
Um, you can find me at my website, wwwdelegated bookkeeping.com, or you can email me @michelleatdelegatedbookkeeping.com.
Such a smart title. Look at that delegated bookkeeping. We will 100% link to Michelle in the show notes of this episode. Um, get her while she still has availability in her calendar. Y’all um, you’re so great at what you do. I’m so appreciative. Thank you so much for being here.
Thank you for having me, Dana. I love being here. It was awesome. You’re awesome.
All right. Well, I will, I suppose I’ll talk to you, uh, end of the month when I get that report.
All right. Take care of my friend.
Dana: Well, my friend, if you were looking for a blinking neon sign that says start your taxes or finish your taxes. Um, yeah, this, this episode is that this episode is that blinking neon sign. And I hope that with the support of Mo money, Michelle, and with the support of all of the money March episodes, you feel confident and calm in doing that. It is okay to not be a numbers person. It is not okay to ignore them. It is not okay to not do your taxes. You are a grown ass person. You’ve got this. I’ve got you now get out there, keep it funky. I will talk to you later back.
Outro: This podcast was produced by me with the help of many; Music by Max Winnie, logo and brand design by Bree Reetz, and a big thanks to Riley Higgins, our executive assistant and editor, and also massive thanks to you. The mover, who is no stranger to taking action, I will not stand in the way of you taking action. I will not cannot stop you from downloading episodes or leaving a review and a rating. I cannot keep you from visiting thedanawilson.com to join our mailing list. I will not ban you from my online store for spending your hard earned money on the cool merch and awesome programs that await you there. And of course, if you want to talk with me, work with me and make moves with the rest of the words that move me community, I will 100% not stop you. Visit thedanawilson.com to become a member and get a peek at everything else I do that is not a weekly podcast. Keep it funky, everyone.