Episode Nine | Tax Prep Made Simple: A CPA’s Thoughts for Small Business

Special Guest: Janet Marcum, CPA
Partner, Van Wunnik & Marcum LLC

Ruth Ann Janson:
Hi, everyone! I'm Ruth Ann Janson, and today I’m joined by a very special guest, Janet Marcum, CPA and partner at Van Wunnik & Marcum here in Dallas. Janet’s firm specializes in serving individuals and small businesses, and we’ve known each other for about three years now.

At The Dove Agency, we don’t provide income tax services, so when our clients need help in that area, it’s been incredibly valuable to have Janet as a trusted partner. She’s been able to meet with some of our clients, take them on directly, and provide expertise where needed.

I thought it would be fun to bring her on today for a conversation—CPA to CPA! We’ll try not to nerd out too much, but we want to cover a few common tax topics that interior designers and other small businesses often face.

Janet Marcum:
[laughs] Sounds good!

Common Questions Interior Designers Ask Their CPA

Ruth Ann Janson:
Janet, what are some of the top issues or questions that interior designers bring to you when you first meet with them?

Janet Marcum:
One of the biggest questions I get is: What business type should I be?

Designers often start out small, usually as sole proprietors. But as their business grows, they wonder whether it makes sense to stay that way or switch to something like an S corporation. You don’t have to make that decision immediately, but fairly early on it’s good to think ahead. Your choice impacts your income tax situation, so you want to be set up in the best way for the future.

Another common question is about home office deductions. Designers ask: Can I deduct my home office expenses? Should I have a separate studio? What if I bring clients into my home to show furnishings?

That’s very specific to interior design because unlike other businesses, designers may actually be showcasing items inside their home. The answer depends on your situation, and it’s something you’ll want to discuss carefully with your CPA before moving forward.

Documentation for Home Office Expenses

Ruth Ann Janson:
That makes sense. Do you have advice on what kind of documentation designers should keep if they plan on deducting home office expenses?

Janet Marcum:
Yes—keep everything! You really can’t have too much backup.

The IRS looks at whether the space is used exclusively for business. If it qualifies, then you’ll want to track all related household expenses: utilities, property tax bills, homeowner’s insurance, internet, and so on. Keep these records organized and accessible so that when it’s time to file, your CPA has what they need.

My rule of thumb: if you think something might be relevant, keep it, and ask your CPA later.

Best Practices for Tax Preparation

Ruth Ann Janson:
What about best practices? Whether it’s a solo designer, a small firm with a few employees, or even a larger team, what steps can they take to set themselves up well for tax prep?

Janet Marcum:
The main thing is: don’t try to do it all yourself. Interior designers are usually amazing at their craft, but bookkeeping isn’t their specialty. And that’s okay!

Rely on experts and tools that are built for this—hire a bookkeeper, use accounting software, or even design-specific software that integrates with accounting platforms. If you start from the beginning with the right systems in place, you’ll save yourself a lot of stress.

Otherwise, what happens is people come to me saying, “I know I bought something for my business, but I can’t remember what it was.” Without records, deductions are often missed.

Using accounting software makes it easy—you can just upload a receipt and attach it to the expense. It’s saved, organized, and ready when you need it. Without that, you risk paying more in CPA fees (because it takes longer to clean things up) and you’ll probably lose out on legitimate deductions.

Tax Planning: Reducing Surprises

Ruth Ann Janson:
That leads into another topic: tax planning. One thing we see a lot with clients is surprise—sometimes in October or April, when they find out their tax bill is much higher than expected. How can tax planning help alleviate that?

Janet Marcum:
Great question. It actually starts with bookkeeping. If you have current, accurate financial statements, your CPA can give you timely advice. Without that, it’s hard to plan.

When your books are in order, you can sit down midyear and say, “Wow, I didn’t realize I’d have this much net income. What should I do now so I’m not surprised at year-end?” That allows us to put strategies in place before it’s too late.

And remember, some actions must happen before December 31 if they’re going to impact your tax return. That’s why working with a bookkeeper and CPA throughout the year—rather than only at tax time—is so valuable.

Ruth Ann Janson:
Yes, that’s exactly how we approach bookkeeping at The Dove Agency. We have weekly touchpoints with clients and categorize transactions regularly, so by the time we reconcile at month-end, our designers already have solid information within about 10 days. If you fall behind, you don’t even know what you’re looking at, and when your CPA asks questions, you won’t have answers.

Janet Marcum:
Exactly. Staying current makes everything smoother.

Wrapping Up

Ruth Ann Janson:
This has been so helpful, Janet. I think we’ve covered some great, actionable nuggets today. Before we close, I want to make sure everyone knows they can connect with Janet at jvwcpa.com if they’d like to learn more.

And Janet, I hear you’ve brought us a closing quote!

Janet Marcum:
[laughs] Yes, I did. First, thank you for having me. This isn’t the most exciting topic, but it’s so crucial if you want to grow your business and stay on track.

So here’s the quote, attributed to Bill Murray:
“The best way to teach your kids about taxes is by eating 30% of their ice cream.” [laughs]

Ruth Ann Janson:
Perfect. Thanks so much, Janet, and thank you to everyone tuning in. See you next time!