The Accounting Show

Episode Summary: A behind-the-scenes look at Mike Murphy LLC's finances — what an LLC actually is, how taxes work, what filing costs, and the simple 3-tool system used to track it all. What You'll Learn What an LLC actually is, and why it protects personal assets differently than a sole proprietorship How LLC taxes work with the IRS, and the real cost of filing The 3-tool accounting system: FreshBooks, Mint, and a simple Google Sheet A monthly reconciliation habit that makes tax time painless Legal Entities Mike Murphy LLC is a limited liability company. Per Wikipedia: "A limited liability company is a hybrid type of legal structure that provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. The 'owners' of an LLC are referred to as 'members.'" An LLC isn't a corporation, and functions similarly to a sole proprietorship — with one major exception: business debt only puts business assets at risk, not personal ones, as long as funds stay properly separated. A sole proprietor going into business debt puts every personal asset (home, savings, everything) on the line — riskier, but far cheaper and simpler to set up. Cost to start the LLC: $350 to an attorney, $150 to an accountant. Taxes Per Wikipedia: the IRS treats single-member LLCs as sole proprietorships for tax purposes — the LLC itself doesn't file or pay taxes; all profit or loss gets reported on Schedule C with the personal 1040. Tip 1: Florida business taxes are due March 15, not April 15. Tip 2: as a sole proprietor or LLC, stash away 20-30% of everything earned — unlike a paycheck, taxes aren't withheld upfront, so the payment happens on the back end. Tip 3: track every dollar spent and earned. Easier said than done, but genuinely the goal. Tip 4: open a dedicated business bank account plus debit and credit cards, kept fully separate from personal finances. (Using a personal card for a business purchase is still technically fine and still claimable as an expense.) Cost to file as an LLC: roughly $300, paid to an accountant to file as an S-Corp. The Tools Foundation: a business credit card for all bills, and business accounts (Stripe, PayPal) for income. Tool 1 — FreshBooks. Sends invoices, tracks expenses, tracks time, and generates reports (expense reports, P&L statements). Snapping a photo of a receipt and entering the total is the entire expense-logging process. Tool 2 — Mint. Intuit's budgeting tool — connects unlimited accounts (checking, savings, money market, investments, credit cards) and auto-categorizes every transaction. Bills and reminders can also live here. The best part: categories can be trained to match exactly what an accountant needs. Tool 3 — a simple Google Sheet. One column of expense catego… Read the complete show notes and resources on mikemurphy.ai. Support the show Subscribe To Weekly Newsletter: AI Unplugged Connect With Me 🌐 Website 📧 Newsletter 🎥 YouTube 🐦 X 💼 LinkedIn Comments, Questions & Feedback: [email protected]