Share Your Thoughts!
If you've ever started a side hustle and thought "I'll figure out the taxes later," this episode is the reality check you need before tax season catches up with you.
In this episode, Violeta and Lindsay sit down with Laura Zarrate, a CPA and founder of Athena CPAs and Advisors, where she helps six to seven-figure business owners nationwide keep more of the money they earn and has saved her clients more than $10 million in taxes, to break down exactly what you need to know about business taxes before Uncle Sam comes knocking. Laura opens up about the most common question she gets from new entrepreneurs: do I need to start an entity, and if so, which one? She walks through why most people start with an LLC, why it's actually about liability protection more than tax savings, and the moment a side hustle should start being treated like a real business.
Laura shares the practical first steps nobody tells you about: opening a separate business bank account, understanding what counts as an "owner's contribution" versus taxable income, and why mixing personal and business expenses is one of the biggest mistakes she sees. From there, she gets into the topic everyone's talking about on social media but rarely explaining correctly, the S corp election. Laura breaks down what an S corp actually is (a tax election, not a separate entity), why it can save you real money on self-employment tax, and why switching too soon, before you're earning enough to justify the extra cost, can actually hurt you instead of helping you.
Throughout the conversation, Laura, Violeta, and Lindsay get into retirement account options for the self-employed (SEP IRA vs. solo 401(k)), the reasonable compensation requirement that trips up so many new S corp owners, and the deductions people leave on the table simply because they didn't know to track them, like the home office deduction and vehicle expenses. They also swap real stories about the systems that make tax season easier, and the wildest client write-off attempts Laura has seen.
We cover:
- Why most new business owners should start with an LLC, and what it actually protects you from
- The difference between an owner's contribution and taxable income
- When a side hustle should officially become a business (and why "recurring income" matters more than a dollar amount)
- Why mixing personal and business finances is the #1 mistake new entrepreneurs make
- What an S corp actually is: a tax election, not a new entity
- The real reason people switch to S corp: saving on the 15.3% self-employment tax
- Why switching to S corp too early, especially with losses or income under 50K, can cost you more than it saves
- The "reasonable compensation" requirement and why you have to pay yourself a real W-2 salary as an S corp owner
- SEP IRA vs. solo 401(k): which retirement account to start with and when to upgrade
- Why you can deduct disability and health insurance as a business owner
- The home office deduction most people don't know about, including how home repairs like a new roof or flooring can be partially deductible
- Fully deductible home office purchases: desks, paint, curtains, blinds, and more
- Why you likely can't buy a car directly under a brand-new business, and what to do instead
- How to properly deduct a vehicle used for both business and personal use (and why a mileage log matters)
- Bonus depreciation and how buying a vehicle in 2026 could mean deducting 100% of the purchase price
- Why having a bookkeeping system (QuickBooks, Xero, or even a spreadsheet) is non-negotiable
This episode is a reminder that taxes don't have to be something you dread or avoid until April. With the right systems and the right professional in your corner, you can actually use the tax code to your advantage, keep more of what you earn, and build real, lasting financial habits into your business from day one.
Mentioned in this episode:
Athena CPAs and Advisors: athenacpas.com
Follow Laura Zarrate and Athena CPAs on Instagram: @athenacpas
This episode is part of a two-part series. Check out the companion episode on Real Estate Chisme for real estate-specific tax benefits.
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I’m not a financial advisor. The information contained in this video is for entertainment purposes only. Please consult a licensed professional before making any financial decisions. I shall not be held liable for any losses you may incur for information provided in this video. Please be careful! This video is for general information purposes only and is not financial advice.
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