How to Money – Don’t Let Taxes Terrify You w/ Hannah Cole (#1064)
Date: November 19, 2025
Host: Joel (iHeartPodcasts)
Guest: Hannah Cole, artist, CPA, and author of Taxes for Humans
Episode Overview
This episode confronts the common fear and confusion surrounding taxes, especially for freelancers, self-employed people, and small business owners. Host Joel sits down with artist, tax professional, and educator Hannah Cole, whose new book, Taxes for Humans, aims to make taxes approachable and empowering. The conversation demystifies tax rules, outlines the key benefits for small business owners, and delivers actionable advice for anyone looking to simplify their tax life.
Key Discussion Points & Insights
1. Personal Splurges and Habits for Well-being
[03:05]
- Both Joel and Hannah confess to splurging on craft beer and coffee.
- Hannah discusses her daily coffee shop visits as a way to build healthy habits, get exercise, and build community.
"The common theme with all my splurges is, like, if it makes me be social or get exercise…those make my life good."
— Hannah Cole [04:54]
2. Artists, Creatives, and Tax Challenges
[05:07 – 09:45]
- Hannah shares her early negative experiences with accountants who didn't take her artistic career seriously.
- She emphasizes that creatives are resourceful but face stigma and structural issues, such as accountants or the IRS mistaking their work for a hobby.
- Underpaid fields (caring professions, humanities, nonprofits) face similar scrutiny.
"Creativity is actually a synonym for resourcefulness."
— Hannah Cole [05:48]
3. The Importance of Tax and Personal Finance Education
[09:45 – 11:15]
- Joel and Hannah agree that basic personal finance and tax courses should be mandatory in schools.
4. Empowerment Through Understanding Taxes
[10:25 – 13:24]
- Hannah ties her book’s mission to activism and social empowerment. Understanding taxes leads to greater civic engagement and advocacy for fairer tax laws.
- She highlights how the US is uniquely supportive of entrepreneurship, with many business perks built into tax law—even for gig workers and side hustlers.
"The tax code is built to give you a financial boost as a new self-employed person."
— Joel [13:24]
5. Schedule C and How Losses Help Small Businesses
[13:31 – 17:35]
-
Schedule C filers can claim business losses, which can offset taxable income from other household earners.
-
This system is designed to help businesses survive early investment years and unexpected setbacks (e.g., natural disasters).
"A legitimate, profit-motivated business can still have losses."
— Hannah Cole [19:42] -
Hannah recounts her experience with Hurricane Helene, noting the importance of resilient infrastructure and community support.
6. Business vs. Hobby & When to Incorporate
[19:42 – 23:59]
- The IRS distinguishes a business by its "profit motive," not current profitability.
- Hobbyists do things for pleasure; businesses aim to make money—even if not always succeeding.
- LLCs provide legal (not tax) protection, while S Corporations affect taxes. The benefits of each depend on the state, and it’s important not to rush to form these entities without need.
7. Systems for Tax Organization
[27:12 – 30:31]
-
Three key systems: receipts (for audits), tax documents (for filing), and bookkeeping (for tracking).
- Receipts need only be saved (digitally or physically), not sorted, and kept for at least seven years.
- Organize all tax documents in one location, digitize as needed.
"You don't need to be sorting receipts…sorting receipts is just a complete waste of time. And I…dismiss you. You don't have to do it."
— Hannah Cole [29:15]
8. Business Deductions (Meals, Travel, etc.)
[30:31 – 32:12]
- Deductions must be “ordinary and necessary” for your business.
- Meals and travel are legitimate but most frequently audited; know the rules to document them properly.
9. Paying Yourself, Quarterly Taxes, and Bookkeeping
[32:12 – 34:41]
- Small business owners should separate accounts and regularly transfer pay to themselves (“owner’s draw”).
- Paying yourself isn’t a deduction; likewise, investing personal money into your business isn’t income.
- Bookkeeping is simplified when all business transactions flow through a dedicated account.
10. Recent Tax Law Changes & Qualified Business Income (QBI) Deduction
[35:04 – 38:23]
- Highlights from the “Big Beautiful Bill”: Expiring energy credits, healthcare tweaks, extended QBI deduction.
- QBI provides a 20% deduction on business profit for small businesses, now extended.
"A lot of the benefit…is actually just keeping in place benefits…established under the Trump [2017] Tax Cuts and Jobs Act."
— Hannah Cole [37:27]
- Many tax provisions are set to sunset in 2029; expect “ugly cuts” or possible tax increases in the future.
11. DIY Taxes vs. Hiring a Professional
[40:00 – 44:43]
- Hannah advocates for self-filing, supported by her book, especially for those with simple returns and limited resources.
- Expert advice or paid prep is valuable when complexity increases (real estate, marriage, multiple investments).
"...A younger person…that's the person who needs this book and who need, you know, needs to be able to just do their taxes on their own because they actually probably have a simpler situation."
— Hannah Cole [44:27]
12. Perfectionism and Tax Filing—Don’t Let Fear Stop You
[50:20 – 52:56]
- Taxes are based on estimates; returns are reconciliation. You do not have to be perfect.
- IRS audits are rare and agents are generally helpful.
"Estimates are imperfect and reconciling is part of the process…perfection is not in there at all."
— Hannah Cole [51:38]
13. Quarterly Estimated Taxes: How to Stay Compliant
[53:06 – 56:41]
- If your last year’s tax bill exceeded $1,000, you must pay quarterly estimated taxes.
- Penalties accrue per missed deadline and daily interest for late payment.
- Safe harbor: Pay 100% of last year’s tax divided by four each quarter, or 90% of the current year’s projected tax.
"You have to do bookkeeping once per quarter."
— Hannah Cole [56:41]
14. Bookkeeping Tools: Choose What Works
[56:58 – 58:24]
- Options range from spreadsheets to paid software; the best system is the one you’ll use consistently.
- If choosing software, make sure it can link with your business bank account for automation.
Notable Quotes & Memorable Moments
"I just want people to have a better sense of what their rights are. And because I find when people have that information, they feel much less scared."
— Hannah Cole [45:50]
"Nobody you talk to in bill collection in any other private area is ever going to be as kind and sort of forgiving as the IRS. They just want basically for you to pay your taxes in any way that you can."
— Hannah Cole [52:23]
"DIYing your taxes…I think it's wise, it's very wise. Just like we're learning about personal finance and DIY investing so that we don't have to pay somebody 1% assets under management fee every single year to do something that we now feel confident that we can do on our own. Maybe the same is true, especially early on, that a little bit of knowledge…can avoid us having to pay a fee that can be pretty significant."
— Joel [59:33]
Timestamps for Key Segments
- [03:05] – Splurge habits and routines
- [05:07] – Artists & self-employment tax challenges
- [09:45] – Education gaps in taxes/personal finance
- [10:25] – Activism, empowerment, and tax literacy
- [13:31] – Schedule C: Losses, deductions, and new business support
- [19:42] – Business vs. hobby; when to incorporate
- [27:12] – Streamlining organization and receipts
- [30:31] – Deductible expenses: meals, travel, and more
- [32:12] – Paying yourself and setting up separate accounts
- [35:04] – Impact of latest tax law changes
- [40:00] – The case for DIY tax filing
- [50:20] – Perfectionism: Why taxes don’t require it
- [53:06] – Quarterly estimated taxes: why and how
- [56:58] – Bookkeeping software and choosing a system
Additional Resources Mentioned
- Taxes for Humans by Hannah Cole
- Free visual guide to tax deductions at sunlighttax.com/how
- DIY tax software (e.g., Cash App Taxes)
Final Thoughts
This episode breaks down the stigma and fear around taxes, replacing them with actionable advice, clarity, and encouragement. Hannah and Joel make a compelling case for learning tax basics, staying organized, and taking advantage of the many benefits self-employed people are entitled to. Whether you’re just starting a side hustle or have been self-employed for years, the message is clear: taxes don’t have to terrify you!