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Episode 199: Getting The Most From Your Tax Deductions— with Wendy Barlin

Deb Zahn: I want to welcome you to this week's episode of the Craft of Consulting Podcast. So on this podcast, we are going to look forward to tax time. And in particular, we're going to talk about tax deductions and other things related to taxes that help you keep the money in your pocket that you should be keeping. And I brought on an expert in this, Wendy Barlin, who's going to walk through all kinds of different advice for what you can be doing with your taxes and what you can be doing in your business that's going to set you up well financially, so let's get started. I want to welcome to my show today, Wendy Barlin. Wendy, welcome back to the show. And I say back because this is our second time trying to record this. Thank you so much for joining again.

Wendy Barlin: You're most welcome. The joys of modern technology.

Deb Zahn: Yes. No, it doesn't always work in our favor, but let's start off. Tell my listeners what you do.

Wendy Barlin: I'm a CPA, and after 25 years of filing tax returns, I have the honor of now helping business owners learn about taxes and educate business owners about taxes, so I sold my firm. I no longer actually prepare the returns. Now I help business owners understand how they can do better, all the things I never had time to do while I was busy filing returns for people.

Deb Zahn: I love that, so now you're able to take the help you do up a level.

Wendy Barlin: That's right.

Deb Zahn: We're going to talk about a bunch of different things related to money and, in particular, tax deductions and how people are handling their money as consultants with the intent of hopefully trying to keep what should be in their pocket, in their pocket. But for an independent consultant who may be their financial system or the way they approach taxes is, let's just generously call it messy... Yeah, we're going to be nice and just call it messy. Why should they be paying attention to this kind of thing? Why should this matter to them as business people?

Wendy Barlin: Well, first of all, I don't want anyone to get their feelings hurt or feel bad. If something is messy, that's bad. I'll tell you, there are plenty of parts of my life that are messy, plenty.

Deb Zahn: Yeah, yeah, yeah.

Wendy Barlin: It's OK no matter what form you're in, but the reason that we really want to help you is that if your records aren't organized, you are leaving money on the table. I would say that 80% of the people who come into my office either don't know about tax deductions they're entitled to, or for some crazy reason they thought they couldn't take them. And so I want everyone to know that cleaning up your records isn't about me making a judgment or the IRS making a judgment. It's about us being able to help you find more deductions. That's where the real money is because we all work so hard, let's keep more of it.

Deb Zahn: That's great. And your dog is super excited about this topic.

Wendy Barlin: My dog agrees.

Deb Zahn: The dog is like, yeah, tax deductions.

Wendy Barlin: Yeah.

Deb Zahn: Obviously, we're going to be talking about the US, so people in other countries, you have to look at your own tax code. But the principles are generally, I think, still the same in what we're talking about. But let's start off talking about record keeping because a lot of it starts with actually being able to track what's going on. And I know because I read your fabulous book that the default setting that unfortunately a lot of consultants fall into is saying, well, I'm just going to use one credit card, or, oh, well I'll just look at my bank statement. And that's record keeping. What's wrong with that? And what should they be doing instead?

Wendy Barlin: I'll tell you that you don't need to run out and buy something expensive like QuickBooks and try and figure out how to make it work. You don't need to do that. That's not what we're talking about. To your point about the bank statements, I think what's very important to understand is that a bank statement is not a proof of a tax deduction, so people will say to me, oh, don't worry, I got all my credit card statements. Yeah, the IRS really doesn't care. In order for you to take a tax deduction for an expense, you need to have a receipt. Now, it doesn't have to be a piece of paper, it could be a photograph or a PDF, but you have to have an actual receipt.

Your bank statement and your credit card are not receipts. And if you think about it, it kind of makes sense. When I go to Target, my credit card statement will say, Target $134, but the IRS has no idea what I actually spent. It could be on clothes, it could be shoes, or it could truly be office supplies, so it is very important to keep that actual receipt that shows what you purchased or else you may risk losing all your deductions. No receipt, no deduction.

Deb Zahn: I think that's a t-shirt that folks should have that care about taxes.

Wendy Barlin: I like that.

Deb Zahn: What's a good way to do record keeping, that's actually going to help?

Wendy Barlin: So it doesn't have to be beautifully A through Z filed in some multicolor filing cabinet. I take photos or PDFs of all my receipts, and I put them in a little yellow folder on my computer, marked 2023 receipts, that's it.

Deb Zahn: Yeah.

Wendy Barlin: If God forbid, you get audited, you attach that folder, it goes to the IRS and they are welcome to scratch through there. If you'd like to go one level up from that. Then the next thing you can do is keep track of your expenses on an Excel workbook or in a notebook. There you keep every dollar you spend that matches the receipt. If you are incorporated, then you need something like a QuickBooks or a Zero. But for those of you who haven't yet set up a corporation, so you're still self-employed or you have an LLC, then any other system that works for you is just fine. It's about the system that keeps track of every dollar you spend, so I don't think there's just one system for everybody, and that's the joy of what I do is I get to know my clients and you can tell me I'm a visual person, I need to see it. Or oh, I love those phone apps. There's this app that downloads my bank transactions and categorizes them. Great, we can make any system work for you. It's about picking a system and then sticking to it.

Deb Zahn: I love that. I love that. Now, I know that you've also talked about some of the dangers of intermingling funds, so if you're a consultant and you're getting paid by various clients and it just goes into your personal account and hopefully you have kept records of it, what are some of the things that consultants should be careful of with doing that?

Wendy Barlin: As a consultant who does not have a corporation, there's no requirement not to commingle. You will not get into trouble, you can commingle. It's simply just not a good practice because as we sit here today, we want to know is our business making any money? Do we owe any taxes? And we can't tell that if it's all muddled and jumbled up in one bank account, so for the most part, incorporate it or not, I do advise you set up a separate bank account where you keep all your business money coming in and all your business money going out so that you can clearly see, this is my personal money, hair, clothes, nails, rent. This is my business money, cell phone, gas, marketing, subscriptions. And that way you can see how your business is doing and how your personal life is doing. Not to say that you can't transfer money between the accounts, you absolutely can, but keeping that separation, I think helps us mentally and emotionally deal with business expenses and personal expenses.

Deb Zahn: And I know also because we talked about this last time, is having an account for you to put your dollars for taxes because there's always that bad surprise.

Wendy Barlin: I am a huge proponent of the Profit First system. If anybody hasn't read the book or listened to the Audible Profit First by Mike Michalowicz, it is life changing. It changed my life, and I'm absolutely convinced it will change yours if you learn nothing else from that book. The one piece is to always set money aside for taxes. And the way to do it is to not say a hundred dollars a month, a thousand dollars a month because you never know if that's enough.

Deb Zahn: Right.

Wendy Barlin: The way to do it is a percentage of your deposits, so every single week I sit down and I add up my deposits for the week, and I put 15%, 1-5 into a tax savings account, and I don't touch that money. And that way as my income goes up, my tax savings goes up. As my income goes down, my tax savings account goes down. Because too many people would come and see me and say, oh, don't worry, Wendy, I got this. I put a thousand dollars a month into a tax savings account. Well, but if your income doubled and you were still only putting a thousand dollars away, you're not going to have enough come the end of the year.

Deb Zahn: That's right.

Wendy Barlin: You are much better off to set up a separate account and always put a percentage of your revenue in there. I use the example of 15 because that's an average from across the country, but it's really important that you work with your tax advisor to determine what your best percentage would be.

Deb Zahn: Yep. Yep, so my percentage is 20%, and I put 20% in there, and I do not touch it because I do know others. And I will admit, I made this mistake one time where, forget the thousand dollars a month. I didn't put anything because I thought, oh, yeah, yeah, I'll get that around tax time.

Wendy Barlin: Right.

Deb Zahn: And I was making enough that could I get it around tax time? Yes, I could get it around tax time. Was it painful? Yes, it was quite painful, and it would've been so much easier if I had anticipated it based on the revenue that I was bringing in. And you know what happened is that last minute getting paid on December 29th for two huge invoices. I'm like, why?

Wendy Barlin: Right. And that's exactly, I had the same experience. People think because I'm an accountant that this stuff comes easy to me. It doesn't, I'm just like you, I get invitations in my email about discounts and sales and last time to buy just like everybody else does. And for me, I had one big savings account, that I put all my money into, and then it came to December, and I had to pay my taxes and my savings account was obliterated. And I sat there, and I cried.

Deb Zahn: Yeah.

Wendy Barlin: Because I was so proud of my savings account, thinking I was going to start the new year rich, and it all had to go away to taxes and there was nothing left, so now I have two accounts, one that saves for taxes and one that saves for me.

Deb Zahn: Yep, same mistake. Same mistake I made. And it only took one time of those tears before I said, let's do this differently. And I read the same book, so I also have an account for profit as well. When it comes to tax deductions, what are some of the common mistakes that you see people make and how do you suggest fixing them?

Wendy Barlin: I would say don't go to Google, don't ask your neighbors and friends what's deductible and what's not. That's the first thing that will avoid any trouble down the road. Taxes are based on one phrase, ordinary and necessary. Any expense that is ordinary and necessary for your business is deductible, so you can see how very broad that is. And that's why it's very important to know yourself, whether you are a risk taker or more conservative. If you're more conservative, stick within what makes you comfortable. If you want to take some risks and play in the gray, ordinary and necessary, how far can we stretch that? But I think the biggest tax deduction that I see business owners avoiding is the home office deduction.

I don't know why, but there seems to be word on the street, a bunch of old school CPAs telling their clients, if you take a home office deduction, you are going to get audited. I still hear that today. And here we are post-COVID, where millions of people are still working from home. And yet I find business owners who say to me, oh, Wendy, my accountant said I can't deduct that. I'm going to get audited. Well, first of all, have you ever tried calling the IRS? There's nobody there, so your chance of audit is relatively slim.

Deb Zahn: That's right. There's like four people left, I think.

Wendy Barlin: Right. 25 years ago, 100%. They showed up at your doorstep with the badge. In 1997, I remember IRS showing up at my client's door with a badge saying, I want to see your office and heaven help you if you had a television, but my office has a television and a couch. I'm in my den right now working, right?

Deb Zahn: Yeah, yeah.

Wendy Barlin: Your home is your office, and if you are entitled to that deduction, please take it. It is not going to get you audited. No one is showing up at your house to double-check your office. It's just not going to happen. Now, it's important to know whether you're eligible. Not everybody is eligible. It has to be your primary office, so if you have an office in the city or somewhere else, but you choose to work from home, then you cannot take an office deduction.

Deb Zahn: Ah, gotcha.

Wendy Barlin: An office deduction, it has to be your primary office. If you have a co-working space, but it is an office with a door. That's what the lease with the co-working space says. Again, no home office for you. If your co-working space says that you only have access to conference rooms, then you can take a home office deduction. Do you see the distinction?

Deb Zahn: Oh, yeah.

Wendy Barlin: And there've been a lot of lawsuits in the last five years with lawyers and doctors who say, well, I see patients at my office all day, and then I come home and, on the weekends, and at night I do billing from home, so I'm taking a home office deduction. And the IRS says, no way. Absolutely not. It is not your primary office. You are using your home for your own convenience, no deduction. I need you to look at your own life and say, do I pay rent somewhere? If you pay rent somewhere, then don't take a home office deduction.

Deb Zahn: Yeah.

Wendy Barlin: You will get in trouble for that.

Deb Zahn: That makes sense.

Wendy Barlin: If that's not the case, then please do take a home office deduction, you are entitled to it. Then the question becomes how much, and this is where working with a tax advisor is important. Knowing yourself is important. How much risk do you want to take? If you're extremely conservative, take out a tape measure, measure your office, measure the space you work in, and that's your deduction. If you want to be a little more aggressive, I use more than just my individual office because here I am in my den. I'm going to go make some coffee and a little bit, then I'm going to go to the bathroom, then I'm going to sit in the dining room, so I tend to use a little more than just my office space, but I try not to take too much because if you take a hundred percent of your home, yeah, no, you got to live somewhere, right, so don't be greedy.

Deb Zahn: Yeah. No one's going to believe that your office is 3,800 square feet. And by the way, so is your house. Now, let me ask this. This is tongue in cheek, so I have office cats. I have two cats that live in my office. Can I deduct their cat tower?

Wendy Barlin: Oh, I love it. Thank you for asking this, so here's how you can, I had a client several years ago who had a white Shih Tzu dog, one of those pretty little white, fluffy things.

Deb Zahn: Oh, yeah, yeah.

Wendy Barlin: And she deducted all her pet expenses, and she got audited, not because of that, actually. She got audited for something else, and the IRS looked at it and went, pet expenses. What is that? Well, She used her Shih Tzu on her website. He was her mascot, so he was on her website, he was on all her marketing material. He was always with her, and she was able to claim that he was ordinary and necessary for her business, so if you can make a claim that your pet's comfort in your office is ordinary and necessary for your business, then more power to you because she was cleared in that audit.

Deb Zahn: That's hilarious, so really, they want to be internet stars, and I should let them is your point.

Wendy Barlin: There you go, there you go.

Deb Zahn: But for business purposes.

Wendy Barlin: That's why I always have that conversation with my clients about, so if this is a necessary business expense, tell me why? Tell me why this is a necessary business expense, and then we can have a discussion, except to say that there are three areas that are not deductible, period, end of story. And so we never, ever go there because the IRS gets very angry if you commit fraud, understandably, right? The three areas that you may never deduct are gym memberships, golf club, or country club dues, and clothing, so just to say, I choose to always wear white when I meet with clients, that doesn't make my clothing deductible.

Deb Zahn: Yeah.

Wendy Barlin: I need to have my logo on it. It needs to be something specific to work, so those three areas, clothing, country club, and gym dues, are non-deductible ever. And when people say to me, but how about, no, don't go there.

Deb Zahn: Yeah, yeah, yeah. I tried.

Wendy Barlin: Yeah, there are so many other categories to play in the gray, just don't go there.

Deb Zahn: Yeah. I thought because I had to do a photo shoot for my website, the clothes that I bought for the photo shoot, I tried that and my accountant wagged her finger at me and said, oh, no, no, no, no.

Wendy Barlin: Yep. Exactly the same for people who get an award, and they have to go to an award ceremony, not deductible. The only time it would be is I live in Florida, and if I was invited to speak in Alaska and I had to go and buy boots and a jacket, that might be deductible because I'm able to show that, that is something that is not something I wear every day, and that I had to buy it specific for an event. But again, when you add up the dollars, why even put that on your tax return? It's like waving a red flag to a bull, so could you deduct it? Maybe. But why?

Deb Zahn: Oh, OK.

Wendy Barlin: I would rather play in other areas that are way less likely to get flagged where I sleep better at night.

Deb Zahn: Yeah. I love that, so what's another deduction that you see folks not taking that they really could if they were thoughtful about it?

Wendy Barlin: I think meals is something else. There's a lot of misinformation about meals, a lot of fear about meals causing an audit. If your income's a hundred thousand dollars and you spend 50,000 on meals, yeah, that's kind of weird, right?

Deb Zahn: Yeah.

Wendy Barlin: But if you spend 10% on meals, I think that's absolutely legitimate. And in fact, the last thing that Trump did in office before he left was create what's known as the Margarita law, and it's called the Margarita law because he wanted to help bars and restaurants after COVID reopen. And the change in the law allows you to now deduct 100% of the cost of any meal eaten in a restaurant, including drinks and dessert, by the way, so the Margarita law now changed things so that instead of your meals being 50% deductible, they're now a hundred percent deductible. And it has to have a business purpose.

Your meal has to have a business purpose, and it has to be in a restaurant or entertainment-type venue. But if you think about it, if you go out to dinner with your husband or your mom or your sister, how do I know who you went to dinner with when you put that receipt in the folder and you must have your receipt, when you put your receipt in the folder and you mark it business meal, how's the IRS going to audit that? Are they going to call me and go, miss Barlin, did you have dinner with Deb on Saturday? And what did you talk about? Again, there's no people there, so where I have seen an audit on meals, they will say, please send your receipts. And I had a client, a young guy in Los Angeles, he had $25,000 in meal expenses.

Deb Zahn: Well, that could be one meal in LA.

Wendy Barlin: Right. But he had his receipts and he completely cleared that audit because he had his receipts.

Deb Zahn: Yeah.

Wendy Barlin: And he just went ahead and said, this was my accountant, this was my lawyer, this was a marketing person, this was a client, this was a... OK, check done. Now, I had another client who didn't have his receipts, and they took away 50% of his deduction.

Deb Zahn: Yeah.

Wendy Barlin: No receipt, no deduction. We negotiated it out. Again, no one's going to jail for not having a receipt. And usually the IRS are people too, and they'll negotiate with us. I'll say, Deb's a really good taxpayer. You can see she's paid her taxes for years on time. Let's negotiate this out, she's just missing a few receipts, and we can usually claw back some of it, but if you want to sleep well at night, keep your receipts and be a little aggressive in the area of meals.

Deb Zahn: Yeah.

Wendy Barlin: It's very hard for them to audit that.

Deb Zahn: Yeah. Well, and most business people talk about their business all the time.

Wendy Barlin: Right.

Deb Zahn: I know that I do.

Wendy Barlin: Right.

Deb Zahn: Including getting advice, telling people about a new idea, so yeah. Do I sometimes have dinner with my mom, and we talk about it? Yes, because I bounce things off of her, she's a smart lady.

Wendy Barlin: Right. And again, be smart about it, so if I take my kids to Chuck E. Cheese, or Red Robin Diner, or whatever it is, I don't call that a business expense because the receipt shows two kids' meals and me, so OK, be smart about it. When my husband and I go out for a nice expensive dinner, yes, that's a business meal, but you just have to think a little bit about ordinary and necessary for my business. And again, never do anything that doesn't feel right to your gut.

Deb Zahn: Yeah, yeah. And isn't defensible in any stretch of the imagination.

Wendy Barlin: That's right, that's right.

Deb Zahn: I know one thing that folks ask is, if I'm doing business, I'm doing well, I know that I'm going to owe taxes. Should I pay estimated payments or should I throw it in that account that we talked about earlier and just pay it when they ask me for it? Do you have an opinion about what makes the most sense?

Wendy Barlin: I always have an opinion, but-

Deb Zahn: I suspected as well.

Wendy Barlin: You might not like it, but I do. I personally don't pay estimated taxes. I keep all the money in my tax savings account all year long because my income fluctuates. I'll have a great quarter and then a slow quarter. And then what if I get sick? What if I have a car wreck? What if I need cash? I'm going to go into that tax savings account if absolutely necessary. If I have paid that money over to the government every quarter, I'm not getting it back and I have a cash problem, so you have to look at your life. Now, there is a price for me making this choice. I do pay penalties. If you don't pay quarterly estimated taxes, you are subject to penalties. I want to be really clear. You are subject to penalties, but the penalties are small.

Deb Zahn: Yeah.

Wendy Barlin: They're generally in the hundreds and not in the thousands, so for me, I do the math and I say, if I don't pay my estimated taxes and I keep the money in my bank account, this is what my penalty is going to be. Is that worth it for my peace of mind? And for me, it's a resounding yes. But again, you have to look in the mirror because I have clients that say to me, Wendy, I don't care. I never ever want to pay $1 in penalty. I don't care.

Deb Zahn: Yeah.

Wendy Barlin: Then we pay estimated taxes. But it's really important to know what your priorities are. Again, no one's taking you away in the middle of the night to estimated tax jail. It would simply be that you would be penalized because the government wants their money. They got a lot of places they got to squander it, so they need it every quarter. And they prefer that I don't hold onto it, so I am willing to pay the penalty. And each person needs to make that choice for themselves.

Deb Zahn: That's right because they're eager to have it. How else do you see that business owners are leaving money on the table, either by missing things like tax credits or forming LLCs or whatever it is that you see that is another way that they're letting money drain out?

Wendy Barlin: Yeah. I think the biggest thing is going back to our record keeping because people will come to me and they'll say, I'm paying too much in taxes. And they show me their P&L statement or their list of income and expenses, and there are things missing. Where's your cell phone? Where's the gas in your car? Where's the subscription to the internet? Where are your business gifts? And they go, oh, I don't know if I can deduct them. Yeah, so I don't keep those records. Well, I can't help you unless I see the full thing.

Deb Zahn: Yeah.

Wendy Barlin: It is very important that you keep track of every dollar you spend so that someone like me can help you find more deductions because you don't know, nor should you, I don't do what you do. And so it's really critical that you keep complete records so that your accountant or your advisor can help you find more tax deductions. It's the same as like you're saying, credits. Most business owners don't even know what credits are available to them. And so their accountants need to be offering those up and saying, you know you could be eligible for the research and development credit. And most clients go, really, I don't do research and development. Well, that law changed a few years ago, and now anyone in the technology, website, course creation world has research and development credits available to them.

Deb Zahn: Wow. And who would know? And if you have an accountant who is not offering those things up.

Wendy Barlin: Right. If you have an accountant, where you drop off your package once a year and pick it up two weeks later, that's like a computer process. That's not a human interaction.

Deb Zahn: Yeah.

Wendy Barlin: You need to be working with someone who actually knows you and is able to spend some time having discussions with you, not just a document processing center.

Deb Zahn: That's right. Yeah, and it was funny, I didn't even get a list. And then I realized belatedly, and we had to file an amendment that, wait, I contribute to retirement every single month.

Wendy Barlin: Why?

Deb Zahn: That's actually a huge deduction that I had not thought of. But again, I asked myself, well, why am I the person thinking of these things? Surely I want someone who does that.

Wendy Barlin: Right. And that's another great point. Retirement contributions. When you are not working in corporate America, you can still do retirement contributions for yourself. They're great tax deductions, and there are several different choices and ways to do it. There are self-employed IRAs, there are 401Ks. You have access to the same benefits that you had as an employee.

Deb Zahn: Yeah.

Wendy Barlin: It's important to step up and do that. But how we know if that's working for you or not is, first of all, I tell people, let's make sure you're profitable. Let's make sure your business is profitable. Let's make sure your cash flow positive. You have money in the bank, your bills are paid, you have savings, you've covered your taxes. Then we can talk about retirement strategies. Sometimes I see people scared to leave their jobs or jumping into the world of being a consultant, worried about their pension plans. That's down the road, and there definitely are tax deductible options. But I think our priority is to create a profitable business and pay your taxes.

Deb Zahn: Yeah, I love that. And I am someone who has been saving for retirement since she was 25 years old.

Wendy Barlin: Wow.

Deb Zahn: Yeah, I'm one of those.

Wendy Barlin: You are rare, you are a rare gem.

Deb Zahn: I'm rare, and I know that, and it has served me quite well. But then again, when I went from a firm to independent consulting, I was profitable immediately, and I had everything lined up already so that I checked all those other boxes and continue to construe to retirement, which is all pre-tax, which is the other thing that I loved about it.

Wendy Barlin: Oh, yeah. Correct. And to educate yourself about what your choices are, for sure. Even for me, I worked so hard at chasing revenue. I was always chasing revenue and I found that the more I made, the more I spent. And it becomes this wheel that you get stuck in because now you've got all these expenses, a bigger cellphone plan, a more expensive car. And it's really important for business owners to parcel out their money, taxes, expenses, savings.

Deb Zahn: Yeah.

Wendy Barlin: And live within what's available for expenses. Because it's not about chasing revenue, it's about chasing profit.

Deb Zahn: Yeah, and I do like the idea of when you're going through your finances, look at the expenses and ask yourself, are those reasonable for you to be spending? Is that absolutely necessary for you to be spending on that? Because a lot of times, I think new consultants are like, oh, I got to set up a bunch of systems. And systems matter for sure, but if you're chasing shiny systems and paying out a whole bunch every month, that decreases your ability to be profitable.

Wendy Barlin: As well as chasing tax deductions.

Deb Zahn: Yeah.

Wendy Barlin: I have so many conversations with people where they call me and they go, if I buy this truck, is it deductible? Yes, it is. But do you need a truck? Do you need a truck? And the changing of that conversation. People get very upset with me when they say, well, is this going to be deductible? And I won't even answer until I say to them-

Deb Zahn: Yeah, yeah, yeah.

Wendy Barlin: Do you need to spend the green money? Because if you need a new truck, or you need a new computer, or you need a system, then by all means, let's make it deductible. But let's not chase deductions, especially when it comes to real estate. That's probably where I hear it the most, is people call me and they go, if I buy a rental property, is that deductible? What cash are you using to buy this rental property?

Deb Zahn: Yeah.

Wendy Barlin: And how does that fit into your life? I always say, green money is way more important than tax deductions.

Deb Zahn: Yeah, yeah, yeah.

Wendy Barlin: Let's spend our money wisely. And then if you can get a tax deduction, great.

Deb Zahn: If you can't and you need to buy something, buy it anyway.

Yeah, yeah, yeah. Well, what's funny is I imagine people are not just chasing deductions, but if they can say it's deductible, that's something they can say to themselves or their partner.

Wendy Barlin: Right, that's exactly right. It takes away the guilt. That's right. If we buy a $150,000 truck and it's deductible, but then it's actually only a $70,000 truck. Yes, but a hundred thousand dollars is leaving your bank account.

Deb Zahn: That's right.

Wendy Barlin: So Wendy, pay the asset.

Deb Zahn: Wendy, if I ever call you and try to have you enable me to make a tractor tax deductible, you get to laugh at me because I am really just trying to convince my husband that we desperately need a tractor. Because if we buy that version, it matches my branding colors.

Wendy Barlin: Oh, right. Exactly. Exactly. Well, there you go. Great idea.

Deb Zahn: There you go.

Wendy Barlin: It's a marketing expense.

Deb Zahn: Yeah, I'd be full of it though. But anyway, this is wonderful.

Wendy Barlin: And to your point though, Deb, I mean, it's kind of a silly example, but to your point, if there is something you need to buy, and it does seem silly, maybe it's not so silly because when we have the discussion of ordinary and necessary, and we really pull that apart with a risk analysis of how could we make a claim that in fact, your business needs this? Why is that? And sometimes we can come up with a really solid response. And that's why there is no silly question, there is no silly discussion because I think we all learn from it. And maybe it's not the tractor, but maybe you end up buying something similar.

Deb Zahn: Yeah.

Wendy Barlin: Or just through a discussion of what is deductible and what isn't, so there's some things that are easy, cell phone, easy, internet line, easy, computer, easy. But then there's so much in the gray, and that's where the real beauty of tax law is.

Deb Zahn: Oh, that's interesting. OK. Well, if you get a call from me, you know why I'm calling then, you're like, oh, she wants a tractor. Wendy, how can folks find you if they need to get some assistance?

Wendy Barlin: Absolutely, so I'm at There are a ton of free resources on my website, all kinds of worksheets for home office deductions, and auto worksheets for your cars, so please make sure you avail yourself of all the freebies at You can reach out to me there too. And my book is for sale on Amazon, it's called, That's Deductible. It's a nice quick weekend read about all this stuff in a little more detail. And it's written for pretty much any service providing business owner.

Deb Zahn: And it has some great illustrations in it, which is-

Wendy Barlin: Why not make taxes a little more fun.

Deb Zahn: Exactly. Well, and it's a great book. I have read it. I have found it helpful, and I'm certainly going to be using one of your free guides to make sure that I get all of my deductions, so greatly appreciate that. Let me ask you my last question that I always ask everyone on my podcast, which is, when you're not doing this, you're not making the world a better place through deductions, then how is it you bring balance to your life, however you define that?

Wendy Barlin: I make time for myself every day, so I either go and play tennis with girlfriends early in the morning, I take a walk, I spend an hour on my Peloton. Even just this morning, I saw an email come in, it kind of took me down a rabbit hole. And then I took my dog and I went for a walk in this beautiful Florida sunshine. And all of a sudden that email just didn't seem so important. And by the time I got back to my desk, my mindset had changed, so I find getting outdoors and walking, running, playing tennis really helps me calm. It's my place of calm.

Deb Zahn: Oh, I love that. And we all need much, much more calm. Wendy, thank you so much for joining me today. This has been so helpful.

Wendy Barlin: You're welcome. Thank you, Deb.

Deb Zahn: Thanks so much for listening to this episode of the Craft of Consulting podcast. I want to ask you to do actually three things. If you enjoyed this episode or you've enjoyed any of my other ones, hit subscribe. I got a lot of other great guests that are coming up in a lot of other great content and I don't want you to miss anything.

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