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What you’ll learn in this episode:
If you’ve ever felt overwhelmed by tax season, confused about how to structure your finances, or unsure if you’re really managing your money the right way in your business — this episode is for you.
In today’s episode, I sit down with Wendy Karlon, CPA and founder of CPN Accounting, who specializes in helping women-owned small businesses get a grip on their numbers and set themselves up for lasting financial success.
Together, they break down the myths, mistakes, and must-dos around tax planning, bookkeeping, forecasting, and structuring your business finances—without the jargon and with a whole lot of clarity.
Whether you’re a startup or scaling fast, this is your invitation to finally feel empowered around your money. Take a listen!
In this episode, you will learn to:
- Simple systems (even if you’re starting from shoebox accounting!) to keep your finances clean and organized
- Why your business bank account and QuickBooks might be your new best friends
- When to consider becoming an S-Corp and what it really means for your taxes
- How to plan ahead so you don’t get hit with a surprise $20K tax bill
- The red flags to avoid when taking financial advice from the internet
💬 Loved this episode? Let’s keep the conversation going—DM me on Instagram (@jessicadioguardimiller) and tell me your biggest takeaway!
Mentioned in this episode:
Work/Connect with me:
Meet Wendy Karlon
As a CPA with over 20 years of finance experience across different industries Wendy understands a lot of different markets as well as the pain points businesses experience. We want to be the one stop solution you need while providing valuable insight and advice to minimize expenses and garner profits. We are not just an accounting firm that you talk to once a year to file your taxes (though we help with that too!). We want to help you to manage your finances and understand your numbers so you can tell your own story.
Wendy created CPN Accounting because she recognizes that many businesses want to focus on serving their customers and doing what they love. Having worked in corporate for a number of years, she did not always see women supported and encouraged to succeed. She wants to pay that forward and change that culture, which is why she wants to empower women to grow their business beyond what they believed possible. But remember, it all starts with knowing your numbers and how your business is performing.
Jessica Miller (00:01.51)
Hello everyone and welcome to this week’s episode of the It’s Your Offer podcast. Wendy, I’m so excited to have you here.
Wendy Karlon (00:08.023)
Thank you, I’m excited to be here.
Jessica Miller (00:10.3)
For everyone listening, tell us a little bit about yourself, your business.
Wendy Karlon (00:13.9)
Yeah, so I am a CPA. I am in central Massachusetts. I run CPN accounting, CPN, small business solutions. And I focus mostly on helping small women-owned businesses get control of their finances and do tax planning.
Jessica Miller (00:34.108)
And I want to say just a big amen to all of that. We’ve had so many conversations for everyone listening here. They know my feeling about knowing your numbers, having control over your money, having the clarity that it brings with that. And I know this is near and dear to your heart, Wendy, with what you help people do in your business and how important it is to make sure those things are done really well. And I feel like we’re like at attack season now. This is like top of mind for people.
So having you on right now, think is very timely. But tell us a little bit about, know, what are you seeing sort of in the marketplace right now with your clients, like things that are going on that you feel like, you know, maybe people need a little reminder about or that, you know, is kind bubbling to the top for small businesses.
Wendy Karlon (01:24.462)
Yeah, sure. First of all, I don’t think we’re ever out of tax season. So, if you don’t make the tax filing deadline, you’re on extension right now. So, extensions go till September or October. it seems like tax season is always in effect. But some things I think are important for people to know is to kind of have structure from the very beginning. So, if you’re just starting out,
Jessica Miller (01:27.97)
Yeah. Damn.
That’s true.
Wendy Karlon (01:53.898)
And, know, that’s most of my clients or they’ve been in business a few years and they either didn’t have the structure or they didn’t have the guidance before. And they’re bringing me in to kind of see how they can manage taxes or other things. I think if you’re just starting out, just make sure you keep everything separate, make sure you have a business checking account, a business credit card. It will make it so much easier to keep things in their spot and also
when you connect it to a system like QuickBooks or something else that you’re gonna use to manage your finances, you only need to connect those two things and it doesn’t get jumbled in with your personal. And the IRS likes it if you keep it separate as well. And it’s much easier to track that way. You can use any system, but I just recommend you have a system. So even if it’s an Excel spreadsheet, a Google Sheet, QuickBooks, whatever system you wanna use.
Jessica Miller (02:36.678)
Mm-mm.
Wendy Karlon (02:49.708)
I do tend to work with QuickBooks a lot more because you can connect your accounts and everything automatically uploads. You can teach it how to categorize for you. So, it makes the process that much simpler. And then as you get busier, hire a bookkeeper. Bookkeepers and accountants are a little bit different. Bookkeepers will keep track of your numbers, get your books up to date for you. Accountants are gonna come in and advise you on tax planning.
Jessica Miller (03:06.342)
Hmm.
Wendy Karlon (03:18.37)
and those types of things and kind of hold your hand and help you to set up things that you might want to think about. Now, I think this is the perfect time of the year to be thinking about this because you can’t, I like to say you can’t plan unless, you know, you can’t save on taxes unless you plan ahead of time. So, you have to think about it now during the year, because there’s a lot of things you cannot do after the year is over to save taxes, like buy equipment or.
Jessica Miller (03:36.859)
Mm.
Wendy Karlon (03:46.478)
you know, buy extra things that might give you a tax break or set up that 401k and fund it. There are some things you can fund after the end of the year, but there are some things like the 401k, you have to have it set up before the year ends. So, there’s those things you can save on like HSA contributions, IRA, if you want to do it that way, but you need to plan for those things and build it into what you’re looking at. And also,
Jessica Miller (04:06.364)
Hmm.
Wendy Karlon (04:17.132)
I think when people look at their taxes, they need to understand depending on what type of business you are. If you’re a sole proprietor, an LLC, it all flows through to your personal return. And the same thing kind of happens with your S Corp, which is you have two separate returns, but it is a pass-through entity, we call it. So, everything gets reported on your personal return and
It’s the combined thing together. So, if you’re married, it’s their joint income and you have to look at the whole picture. It’s not just looking at the business, what I like to tell people. So, what I have seen problems with is, especially over the last couple of years, I forget when they changed the W-4, but it’s the withholdings that people take out of their paycheck. So, if you’re not a business owner, if you’re just working for somebody else, the withholdings have gotten a little wonky.
and people don’t have the right amounts coming out. So, I’ve been trying to advise people as I file their taxes for them, hey, your withholdings are a little low. You might want to advise, you know, revise your W-4 so that next year we don’t, you don’t end up owing that much money, but you need to plan for all those things. So, it’s a combined thing together. And I think, you know, this is not intuitive to people. A lot of people start their businesses and they have no idea how to run a business.
We are not taught this in school, at least before you get to college, even maybe how to write a check anymore, or it’s all electronic payments and stuff now, but you need to know how to look at your numbers to know, even if you’re doing well in your business or not, where you’re spending money, you could be able to, there’s a lot of people who will sign up for subscriptions and forget about them. There’s a lot of things you can eliminate and save money on.
Jessica Miller (06:00.583)
yeah.
Jessica Miller (06:05.008)
Mm-hmm.
Wendy Karlon (06:05.55)
Of you end up paying more in taxes, but there’s ways to balance that too. So, if you plan for it and you do quarterly payments throughout the year, then you don’t get to April and have this huge tax.
Jessica Miller (06:17.88)
Yeah, I think you touched on something which is really important and that is like having the visibility. It’s understanding your numbers. It’s not being afraid of them or waiting to the last minute. And even for established businesses, sometimes we’re just like, we’re doing the thing every day. And if you don’t get into that routine of number one, being educated and understanding what you’re looking at, but then looking at it consistently, it can really sneak up on you.
I started, I know my accounting journey in my business with like my shoebox accounting, which I didn’t even know was a thing. think until I met you, you’re like, yeah, that’s really a thing. I was like, I just saved all my receipts in an envelope. You know, I was like so proud of myself. And then the next evolution of that was, was I think exactly like you said, separating out, like this is where I’m going to pay for my business expenses. This is going to be that account.
So, it made actually like tracking all those things one step easier because all of those, you know, every spend in that account or everything that came in was in one place. So, I was like, okay, we’ve graduated. But then it was QuickBooks, like what is really happening with these numbers? And I think that would be a question that I have, you know, for people that are, you know, starting out or maybe they’re just moving into this more sophisticated understanding of their numbers, you know,
What is the easiest thing that they can do first to do that? Because maybe they don’t have tons of money to throw at it, but they need to invest in it. Where would they start?
Wendy Karlon (07:51.512)
Well, like you just said, mean, setting up QuickBooks so that the items are coming in there and that you can see, hey, this is what I’m getting paid and this is what’s going up the door. You can run with profit and loss statements, which is just the income coming in, that expense is going out right in that system so that you can get kind of a snapshot view what’s going on. What I like to recommend for people, if they are going to set up a system or something like that,
Jessica Miller (08:00.966)
Hmm.
Wendy Karlon (08:17.438)
is to dedicate a couple of hours on whatever admin day you have during the month and just make sure you dedicate the time to categorize or look at what’s coming in and out and make sure you know what’s going through your account. I like to say you should never gauge your business by your bank account because you really, that doesn’t give you an idea of what’s coming in and out until you look at the actual numbers. The balance may be high, but.
Jessica Miller (08:41.978)
Yeah, I think that’s so true.
Wendy Karlon (08:46.286)
You have no idea.
Jessica Miller (08:47.204)
Right, right. And the other side is true. I mean, I remember when I first started doing this, I would be, you know, in this mentality, like every month, everything resets. So, I would get into the next month and I would be like, okay, got to grow my business, you know, got to do this without realizing that, you know, there’s like payment plans and there are different things that are coming in. And I would go into QuickBooks and actually look at the way the money was moving. And I was like,
Wow! I was so pleasantly surprised but I spent weeks like biting my nails and freaking out for no reason. So, like either way you don’t want to be in the dark. You know you want to know what’s going on.
Wendy Karlon (09:28.502)
Yeah, and I think part of when I say tax planning is eventually once you know the numbers that are coming in, you’re planning for the year. Like, technically you’re paying taxes on something you have no idea about, right? Here we are right now in June, you’re halfway through the year. Yeah, you know how much you’ve made through June, but you have no idea what’s gonna happen July through December, unless you have contracts set up, like you said, coming in, but.
Jessica Miller (09:38.94)
Mm-hmm.
Jessica Miller (09:43.1)
Mm-hmm.
Wendy Karlon (09:56.92)
you have no idea if new things are going to come in or some big expense is going to come up that you haven’t counted for. So, it is kind of a guessing game, I would say, but working with a professional to kind of give you those projections or to have you think through it, I think is worth it. And then we estimate quarterlies off of that. And then we can always adjust as especially
When you get to the end of the year, the last quarterly is due in January, January 15th. So, we’ll know at the end of December how much you’ve made and has come in, especially for the cash reporters.
Jessica Miller (10:31.098)
Yeah, and I think you mentioned something that’s really important too. That’s like not a hugely sophisticated thing, but it is a thing which is forecasting. It’s making those assumptions. It’s putting those things in there for different scenarios and being able to not get sideswiped by those things. You know, good and bad to your point, like life could be good, business is great, you’re making all this money, but then you need to make sure that you’re prepared for the tax implication of that or like an expense that comes out of nowhere.
Wendy Karlon (10:39.523)
Yes.
Wendy Karlon (11:00.95)
Yeah. And I feel like it’s much more manageable if you do do the forecasting and you pay the quarterlies because then, yes, you’re paying the taxes, you’re paying the same amount, but it’s not as impactful as getting a $20,000 tax bill in April. then your cash flow, you might have issues. A lot of people don’t have that just sitting in their bank account.
Jessica Miller (11:24.718)
Right, absolutely. For businesses that are more established and they’ve got these things in place, when they do this well, what are some of the things that you’ve seen they can really capitalize off of on the back end? Is it figuring out non-S Corp or is it setting up the benefits piece or what do you see there as far as things that they can really lean into once they have a handle on this?
Wendy Karlon (11:52.928)
Yeah, I think, like you said, retirement plans are a big one. You can get a deduction for those for contributing to them just like you would if you were an employee. there’s some there’s the SEP plan, which is a self-employed plan, which you can contribute 25 % of your profits to and get a deduction for that. So that reduces your taxes.
And then there’s also a solo 401k plan, I think is great, but you have to have a lot of money to fund it. And the reason I think it’s great is because you can get the deduction for the employee piece, just like you would if you were working. let’s say I think it’s 23,500 for 2025. And then you can also contribute 25 % of your profits as well. So, you get a higher deduction, but you have to have the cash to fund it too. So, for some people that’s just not manageable. And then, you know,
So, you can set up those things, but yes, then you would know if you’re at the level of whether you should go to an S-Corp or not. My rule of thumb usually is like, if you’re making 80,000 to a hundred thousand profit-wise, you bottom line after your expenses, you might want to consider going to an S-Corp. And S-Corp isn’t right for everyone. I think that they kind of drive it out there. It might be on TikTok or this one.
Jessica Miller (13:12.059)
Yeah.
Wendy Karlon (13:12.814)
some, some rumoring going on, but, um, there are expenses for an S-Corp. I mean, the reason to create an S-Corp is as, um, business owners, we pay self-employment tax. So that is made up, it’s called FICA and it’s made up of social security and Medicare. As a business owner, we pay the employee piece and the employer piece. So, we end up paying 15.3 % in taxes on any income.
you know, profits that we make, and that is added to the federal side. So that’s why the federal always seems higher. If you’re employed by somebody, you only pay half of that. You pay 7.65 % and the employer picks up the other piece. So, when you’re self-employed, you are paying higher taxes. You can save on some of those by setting up the S-Corp.
But the costs related to that are you have to set up payroll and you have to pay yourself on payroll and you have to pay yourself what they call a reasonable salary, which can vary by industry, by person. After that, the profits that are left over are not taxed at that 15.3%. So, it could be significant depending on how much you have left over and you can take those out of the business as well. You don’t have to leave them in the business.
Jessica Miller (14:23.932)
Hmm.
Wendy Karlon (14:31.63)
But like I said, there are costs associated with it. You have to do two tax returns. You have to file a tax return in March for the S-Corp, and then you have to still file your personal return in April. So, it costs you more per tax return. It costs you to set up payroll. You might have some legal things that you need to do if you want to convert. That’ll cost you a couple of thousand dollars. So.
Jessica Miller (14:44.709)
Mm-hmm.
Wendy Karlon (14:53.87)
It’s just things to think about when you are converting and it’s something else to manage. you know, oh, and then there’s also a corporate excise tax. If you live in Massachusetts, like we do, we have a corporate excise tax that’s $456 a year.
Jessica Miller (15:06.766)
Yes, lucky us. Yeah, it’s funny because to your point, and this is why it’s really important to like understand all those pieces and the nuances, you know, both from a very high level. yeah, you know, the payroll system, $60 a month, and then the blah, blah, blah, blah thing is whatever. then your $1,500 for your S Corp tax being, you know, whatever filed. And it’s just all those pieces. So, you might even
Wendy Karlon (15:08.428)
Yeah.
Jessica Miller (15:34.653)
you might save some money or you might end up like breaking even. then, you know, just, gives you information to make good choices when you know what’s going on. Um, and I think, you know, I always tell both business owners and I’m curious your thoughts about this too, Wendy. mean, I think there’s a lot of great things you can do as a business owner with your business as an asset. And it is, it’s a huge asset, knowing your numbers and understanding how that money moves. And you don’t need to be an accountant. That’s why we work with people like you.
But knowing enough so you can ask good questions and you’re not afraid of your money and you realize it’s a hugely powerful leverage point, I think is one of the most important things. And I have seen more often than not, the worst offenders with this sometimes are the people who need the money the least. Like they’re doing great, they’re making all the money and the thing is just on autopilot. So, I think those easy things that you can do like,
Get educated, talk to the people that you’ve hired. If you need to hire someone, hire them. Set aside time that you’re making it about your money, you’re doing those administrative things. And even get in spaces where people are really empowered around their money. It’s exciting and it’s something that’s really valuable because there are a lot of cool things. I think sometimes when we’re afraid of it and we kind of push it to the side and we think it’s just gonna go away, I’m gonna put it over there, that’s where we get into a lot of trouble.
And that’s not, people don’t need to be in that place. And then also I think the other thing is getting, and I say this all the time and Wendy, you and I have talked about this, you’re in different groups or whatever and people are giving all sorts of advice about what to write off and all the things and making sure that you’re getting your information from a good place and that there’s…
some of these things are judgment calls and like understanding what your judgment calls are and making sure you’re getting some information from, you know, credible places. And I’m curious what your thoughts are on that. Cause I think we see all sorts of crazy things in some of these groups.
Wendy Karlon (17:44.82)
Yeah, I mean, I tend to be more conservative. I would rather have you write off less stuff if it’s questionable than for you to get an audit from the IRS because the last thing you want is an audit from the IRS and have to pull out everything. In respect to that, I would say that just because we’re in the digital world, please still make sure you’re saving your receipts, even if they’re digital.
Jessica Miller (18:10.204)
Yeah.
Wendy Karlon (18:10.776)
properties like emails, stuff you’re purchasing and everything like that. Cause if you are ever audited, you have to still come up with those receipts and prove that you had those expenses. But yeah, I mean, I would definitely talk to an accountant or a bookkeeper or whatever. mean, I lean more towards like a CPA or an enrolled agent in asking the questions about deductions, but you really want to know whether you can.
take certain things or not. think a lot of people think, I own my own business. I can just deduct everything. I’ve heard the, I can deduct every meal that I actually mentioned my business. And even if I’m, you know, eating all day long and I’m like, doesn’t quite work that way. You really supposed to be careful about meals. If you have business meetings or you’re meeting with potential clients or networking and stuff like that. Yes, you can deduct some.
Jessica Miller (18:42.48)
Yeah.
Wendy Karlon (19:04.022)
of the food expenses, but it is only 50 % on the tax return anyhow. So yeah, I think I would just be cautious about what you’re right. mean, think about it. The meal thing I like to think about as if you like are an employee of a business, you’re going into work every day, you go down to the cafeteria or downstairs or whatever and you get lunch, they don’t reimburse you for that and you can’t do anything with it on your tax returns. So, think about it.
Jessica Miller (19:32.622)
Mm-hmm. I’m just waiting for them to reimburse all my haircuts
Wendy Karlon (19:35.982)
I have had that question too. Like my nails, my hair. like, I mean, but if you are, you know, if you’re in front of the public every day, like, I don’t know, a news anchor or something, maybe that is, you know, acceptable because you have to maintain that appearance for your business.
Jessica Miller (19:41.006)
Right?
Jessica Miller (19:50.032)
Moose anchor, yeah.
Jessica Miller (19:57.297)
Right, right. And I think you gave some great advice one time and my husband’s echoed this too. Like you’re passing the red face test. Like you never want to be in a questionable sort of a position. If there’s that little part of your brain that’s like, I don’t know. Like just don’t go there. Like I’ve always used that as a litmus test, you know, is this reasonable? You know, yes. You know, even research, like, you know, for some people who are in different industries,
you know, and you’re working with clients, maybe you have to like, you know, use the thing that they’re talking about, things that really make sense. I think that’s always a good place to start and then getting some, you know, advice from somebody who’s a professional is a good idea, you know, but some of the things that are like really authorial, like I had to go to Six Flags. I don’t know. It was research. No, not unless you’re building roller coasters, maybe, you know.
Wendy Karlon (20:51.086)
No, I think I saw a post about a dancer who wanted to write off her $2,000 lash extensions. I don’t know if we can do that. Yeah.
Jessica Miller (20:58.172)
Oh yeah. Yeah. Too bad. No, this was so, so valuable, Wendy. Where can people find you on the interwebs if they want to connect with you?
Wendy Karlon (21:09.614)
Yeah, it’s www.cpnacounting.com and it’s CPN, not CPA. I think people get that confused. CPN is my children’s initials there, Christian, Patrick, Nicholas. So that’s why I named the company what it is. But yeah, mostly you can find me on my website. You can book a call there with me. So free consultation if you just want to talk about your situation.
Jessica Miller (21:19.12)
Mmm.
Jessica Miller (21:25.852)
Smart.
Wendy Karlon (21:38.318)
And what I mostly handle is the tax planning during the year. I call them quarterly is where we meet quarterly. We go through your business, see how you’re doing, plan for those quarterly payments, but also do projections and talk about things you might want to buy or even making sure you pay yourself or setting up those 401ks. Those are the things that we kind of.
It’s advisory, you have your own retainer, you can ask me questions throughout the year. Those are the things that I think are key because if we do that during the year, then when we get to tax filing time, it is not a gruel. And the other thing I just want to say about that is if I can add in here that tax season is really tough. mean,
Most people don’t get their actual forms. mean, they’re not required to be mailed out until January 31st. By the time people actually get stuff, it’s almost like February 15th. S-corps and corporations, partnerships, all of those things are due March 15th. So, you basically have a month turnaround for a lot of clients all at the same time. And then the personal taxes after that are due a month later on April 15th. So, you can imagine we have a two-month crunch and
Jessica Miller (22:46.458)
Maybe.
Wendy Karlon (23:01.538)
Having things set up in place ahead of time, if you’re working with somebody during the year, your numbers are updated, makes it so much easier to do your tax return and get back to you and let you know what’s going on. And a lot of times it is down to the wire on the 15th, I might be talking to you because it’s such a short period of time. I like to say they should have done it.
June 15th. Like that to me makes the best sense. Like everybody gets their stuff in, we get everything updated and eliminate extensions because then people put in extensions and it’s extended until October for most and people forget about it. They go away for the summer and then September it starts all over again. So, it would just be easier if it was not that they’re going to change it because I think they should change it. I would love that. you know.
Have a little heart, I guess I would say for your tax repairs because yes, we are putting numbers in a spreadsheet and doing the things, but it’s tough during those two months. We don’t take any time off.
Jessica Miller (24:07.194)
Yeah, yeah, no. And I think, just to sort of echo this sentiment, if there is one thing that you can do for yourself, it is get organized around your money. I’ve always been a huge proponent of that, even when I was in corporate America about, especially for women, being empowered around your money. For the people that are listening to this podcast and the people that I know, they are amazing. They are capable of amazing things. They have amazing businesses. The sky…
literally is the limit. Part of being able to capitalize off of that is being educated and having some control and oversight. So don’t make it the last thing that you think about. And taxes aside, like that’s just one piece of how you manage the wealth that you’re building. There are so many opportunities, but you have so much opportunity with being a business owner. So, get educated, find the people that you need to get educated, find a CPA or a bookkeeper that
actually both, that you love, that you can trust, that are gonna do the things like you’re talking about, Wendy, which is not be myopic, just about the tax filing. It’s about the whole picture. And the more that you do that, the more set up you are for taxes, and the more you’re just set up for success in general. So, like this is a real thing. Businesses make money, that’s the goal. And we wanna be able to have oversight on that piece. So, I so appreciate you coming in and sharing that, Wendy. And yes.
Love your accountants, be nice to them during tax season, and really leverage them for all their knowledge, it’s so helpful to be in that space. So, Wendy, thank you so much for coming on today. This was Pure Gold. We so appreciate having you here.
Wendy Karlon (25:49.592)
Well, thank you for having me.
Jessica Miller (25:51.197)
And for everyone listening, until next week, I’ll see you then everyone. Have a great week.
