At this point, most have heard about ChatGPT. This is not surprising as it is pretty astounding technology. For those who don’t know, however, it is a piece of artificial intelligence that is raising a spectrum of questions from what jobs are about to be defunct to is it going to make plagiarism impossible to detect when it comes to schooling. It then comes to the ultimate question of is there enough information on the internet that personal expertise is no longer that valuable.

But since you are here, let me put any questions you might be having about us to rest – this recent Bloomberg article says that ChatGPT failed to give a complete answer on tax advice 100% of the time. And yes, that is a bit of a nuanced conclusion, but I think it also really captures the value of professionalism and experience.

First, let’s concede what this is not saying. Of course, it’s not impossible to get an overall sense of a correct answer through an AI such as ChatGPT when it comes to a tax question. I mean, tax laws are out there on the internet, they aren’t some secret only passed down in clandestine ceremonies held by candlelight while wearing cloaks. Just like any general tax question that you put into Google, a general sense of a tax situation is not difficult to obtain.

But where ChatGPT is failing is in the follow-up questions. It is understandably not always clear when those should be asked (and from an algorithm’s POV, it has answered the question that was asked, the job is done). A computer can know how to handle the question it was asked, it cannot always know where else this question should lead.

ChatGPT’s power remains fascinating. The potential of AI can be both exciting and frightening. It’s not an expert yet, though, and that leads us back to why you ever consult an expert in the first place.

When you pay an expert, you are paying for the time they have put in to gain the skills and knowledge that it is not worth your time to master. It’s not that with enough time and resources you couldn’t master a subject. You just may not have the time or resources to do so, or you may just not be interested in a subject enough to care enough to do so.

I will not be bold enough to claim an AI will never be able to achieve levels of expertise in some areas where that learning and experience becomes unnecessary. But it is clear that we are not there yet, so still place trust in the experts that you already know.

Warmly,

Josh Bousquet
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A few times in this spot I have recently mentioned how being on top of your bookkeeping and/or tax preparation gives you the chance to potentially take more advantage of legitimate tax deductions. I recently was struck by the idea, however, that maybe that ideas starts a step or two ahead of what some people need. So let me take those steps back today.

First, a tax deduction does not mean that it decreases your final tax bill by that amount. Instead, a deduction will decrease the amount of your taxable income, meaning you will be taxed on a lower amount. So let’s say you bought $100 of office supplies for your business, it doesn’t mean you have to pay $100 less in taxes, but if means you will be taxed on $100 less of income.

Next, obviously not everything you buy during a year is tax deductible. If that were the case, you could just spend all your profit and never have to pay taxes. The rules on what is deductible (and possibly how much of it is) are where you can start to get into the weeds of where people feel overwhelmed with tax talk.

If you have specific areas you are interested in, though, you may be able to get some knowledge without getting too stuck. The IRS’s rules for deductions are published in Publication 535, which can be reached via this link.

This publication only discusses deductions but is still 57 pages of information laid out over three columns with a small font. And it is probably no surprise that this is not the most scintillating reading, either. It is grouped together well, though, with clear subject headings, so it may help lead you to an answer of a definite question. At the same time, there could be value in looking it over and maybe thinking about some areas where you could find deductible expenses that you would not have thought of before.

Either way, there is power in having information, even if the answers found aren’t the ones you were hoping for. There is also the potential for information overload, though, and that is where having someone on your side you can interact with and ask questions can be beneficial. So do not shy away from gaining the power of having even more information and know we are happy to help you get it over this next month as we finish up this often confusing season.

Warmly,

Josh Bousquet
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And suddenly it is March. We are about a month and a half into tax season and there is about a month and a half to go. Remember when there was so much time left to get all this stuff done? Well, 50% of it is gone.

Of course, we still understand why people procrastinate getting all this tax stuff done. No one WANTS to do it. And then there is this article about a recent study that says 80% of American small business owners feel some stress at tax time.  But if you had the chance to avoid stress for a time, why wouldn’t you?

Well, let’s talk about some reasons why not.

One of the biggest reasons people put off handling their taxes is a worry that they won’t like the final answer. So again, if you are choosing to put off receiving bad news, we can understand why you would do so. At the same time, however, the sooner you get this news, the more time you have to put together a plan to handle it. You can’t make your tax liabilities go away, but you can give yourself more time to explore options about how to handle them.

Also, if you have these worries, that’s a good tip-off that your records and bookkeeping may not be exactly perfect. Then it is as if this also forces you to face a prior negligence. If that is the case, then the sooner you get a move on it, the better it will be by the time you get to filing your tax return, and the better it is, the better that tax return is going to be. You are not likely going to accidentally discover some more income but you may be able to get some receipts and expenses in order that will end up being deductions.

If these are the types of concerns that keep you from wanting to face your taxes, these can also largely be handled both ahead of time and rather constantly throughout the year. Speaking with a tax professional can help you put a plan together to make a good calculation of your expected tax liabilities and make the proper estimated payments to handle them. Getting a little help with that bookkeeping can also help ensure that you are staying on top of those numbers and making them as accurate as possible. Then come next tax season, a lot of the stress one feels now can fade away.

​Remember, you are only paying taxes because you have made money. This is not a bad thing. Sometimes you just need a plan to make sure you are ready to handle it correctly.

​Warmly,

Josh Bousquet
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​There are many ways to make mistakes on your tax return and many different kinds of people make them. We have seen this recently as actor Danny Trejo has declared bankruptcy as part of a plan to handle a $2 million tax debt.

There are few details available about this, but Trejo flippantly joked that he has learned dog grooming is not a legitimate expense. This would be one thing if he was handling his taxes himself, but as someone who runs multiple businesses and whose acting work probably takes him across many states in most years, that would have been a tough task for him to handle alone. But hey, maybe he did, and maybe he legitimately concluded some things were deductions that should not be.

“I take my dog to photo shoots with me, if she ends up in the picture, I need her to look good for my own image.” I can follow this train of logic where it seems reasonable anyway.

But if he did have help, then shouldn’t he have received better advice than what he got? We cannot be afraid to work with people who will tell us “no” and not simply seek someone who gives the answers we want. This also applies if you’re doing it by yourself, you need to be able to check yourself and not wish things into compliance.

This can be seen in another story involving tracking mileage for work.  On the surface, there is nothing wrong with this, for taxpayers are allowed deductions for legitimate business use of a vehicle. There are rules surrounding this, though, and the most important one may be the need to keep a mileage log.

Now, this story even has a taxpayer who submitted a mileage log to the IRS. But then, the agency could not corroborate that the places he was traveling to were locations where he would have conducted business. And some places were visited on the same day across different years. This seems like a half-hearted effort that was then copy and pasted.

At least in this case, it seems clear that the taxpayer was really trying to get away with something. It’s much more of a ‘well, you just got caught’ feeling. But maybe this was someone well intentioned, again. Maybe they really did travel for work but did not keep an actual log as they were going, and tried to create something that would give them a bit of what they would have been legitimately entitled to. Again, someone who could give them real answers may have helped.

So if you do have any questions about handling your taxes, seek out an expert, and ask quick before their calendar gets too full during this busy season.

​Warmly,

Josh Bousquet
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We have talked enough of taxes lately, and surely will be doing so more over the next two months or so, so let’s take a step back today.  And let’s take that step back by talking about how good it can be to take a step back.

This idea came to me when looking at this article from NPR talking about how commuting can be a good thing. Of course, this headline sticks out as soon as you see it, for it must be a decided minority of people who really look forward to their commute. It’s a case where we mostly are thinking about the destination, not the (potentially long and arduous) journey.

But what the article discusses is how commuting becomes the liminal space between being at work and being at home and helps transition the mind between those two states. And this idea of having that moment to disconnect a bit, to leave the work stress behind, makes sense.

The traditional workspace provides this naturally, but we work with many small businesses where that can be much more difficult. In that situation, the difference between work time and personal time can be much cloudier because so much of your life becomes about your business.  Heck, your business and home space may even be one in the same. I am not here, however, to preach that this situation couldn’t work for some people. It is possible to have a level of drive where you can thrive being able to pick off tasks at all times of day and where that combination of work and home is a positive.

It is also possible, though, that you feel pulled toward never really checking out of work mode and it’s wearing you out. This definitely can be exacerbated, too, if you are doing your work at home and there’s no transition in and out of your workspace.

Now I don’t think (and the article doesn’t really claim) that there is something magical about the act of commuting itself. But there is value in just taking stock of where you stand and allowing yourself the grace to transition away from work if that’s necessary.  So that is what I mean here about the value of taking a step back.

We never perform best when stressed, overworked, and tired. Sure, you can knock off some tasks in that state, but they will take longer and not be done as well. So step back, check in with yourself, see how things are going and take a break when you need to. Keeping balance will keep you moving forward.

Warmly,

Josh Bousquet
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