09/08/2026
💸 TUESDAY TAX TIP: DON'T RUN BUSINESS FROM A BANK APP 🙅
Today’s tax tip comes from your favorite bookkeeper, Kim Davis, who says, "Stop running your business from a bank app. Reviewing your financial reports regularly will help you stay tax compliant AND lead you to make better decisions for your business."
Your bank app only answers one question: How much money is in the account now? 🧐 But the IRS doesn't tax that number. It taxes income, allows deductions you can prove, and expects tax money to be set aside — even when it's sitting in the same bank account.💰
When you run the business off today’s balance, tax problems sneak in 😳 and here are a few big ones:
1️⃣ You spend money that was never yours.
Sales tax collected, estimated taxes owed, and payroll withholdings look like available cash. They’re not. Spend them now, and your next deadline is filled with stress, penalties, and scrambling for money already spent.
2️⃣ You miss deductions — or claim ones you can’t support.
A bank charge is not automatically a deductible expense. Category, business purpose, and receipts matter. Wait until tax-time to reconstruct the year, and you risk leaving money on the table or filing deductions you can’t back up.
3️⃣ You file from a story that perhaps the year didn’t actually tell.
Profit on paper and cash in the bank are NOT the same. Unpaid invoices, equipment purchases, and money you took home all change your tax picture. Those details live in financial reports — not in the bank balance.
Once a month, every month, after the books are caught up, look at these three reports:
✅ Profit & Loss — What was income, and what's deductible?
✅ Balance Sheet — What do you still owe in taxes, loans, and bills?
✅ Statement of Cash Flows — Where did the money come from, and where did it go?
You don’t need to become an accountant. You only need twenty minutes and a good habit. 🕙 Review your financial reports regularly throughout the year. 📊 You'll not only stay closer to compliant, you'll have a much greater understanding of the overall health of your business. 🤓
Never really looked at the financials? Don't fully understand the reports? Call 423-86-TAXES or text 423-295-8995. 😎 We Got You.
