So Money Podcast with Farnoosh Torabi

Episode 1907: A Tax Strategy That Puts Humans First
Guest: Hannah Cole, Founder of Sunlight Tax
Date: November 19, 2025

Episode Overview

This episode centers on making tax strategy accessible and empowering for freelancers, creatives, and self-employed individuals. Farnoosh Torabi welcomes Hannah Cole, tax educator and founder of Sunlight Tax, to discuss her new book, Taxes for Humans: Simplify your Taxes and Change the World When You’re Self Employed. The conversation dives into demystifying taxes, practical systems for organization, breaking common tax myths, and linking personal finance to social justice.

Key Discussion Points and Insights

1. The Motivation Behind Taxes for Humans

Timestamps: [05:05]-[08:33]

• Hannah’s Background: Cole is a professional artist who experienced firsthand the alienation and lack of support creative professionals often face around taxes.
• Empowerment Through Education: The book is designed for self-employed people—especially "anyone who feels like a weirdo" or outside traditional boxes.
• Rejection of Shame: Hannah recounts an experience with an accountant who questioned her legitimacy as an artist. She channels this to create a book that validates and empowers readers:

  “I got you and we are not going to do that. Your work is important.” (Hannah Cole, [08:33])

2. Breaking Down Tax Myths and Limiting Beliefs

Timestamps: [09:04]-[10:54]

• The prevalent “tax burden” narrative is a product of corporate and billionaire interests, not reality for most Americans.
• Taxes are positioned as investments that provide education, disaster relief, public services, and safety nets:

  “For most of us, if we are working class, middle class, we're getting back more from taxes than we pay in... Taxes give back to you in the form of disaster relief... It gives back to you if you're being domestically abused.” (Hannah Cole, [09:18])

3. The Three-System Approach to Tax Organization

Timestamps: [11:27]-[16:45]

a) Receipts

• Keep all receipts (digital or paper) in chronological, annual order. Digital receipts in inbox folders are acceptable.
• Credit card or bank statements alone are not sufficient—IRS may disallow them during audits.

b) Tax Documents

• Designate one spot for incoming tax documents (both physical and digital) to avoid missing any in tax season.

c) Bookkeeping

• Essential for self-employed/1099 earners but not W2 employees.
• Use a separate bank account and spreadsheet or simple tools for tracking income/expenses—no need for complex software unless necessary.

“If you just realize there's three things and that they serve three different purposes, it helps you not cross wires on them.” (Hannah Cole, [11:27])

4. Choosing Tax Software with Caution

Timestamps: [18:34]-[20:21]

• Commercial tax software (TurboTax, TaxSlayer) is user-friendly but can upsell or mislead about free filing offers.
• The IRS requires that most filers have free options—but these are often hidden by tax software companies.

5. Facing Tax Fears and IRS Audits

Timestamps: [20:35]-[22:44]

• The fear of audits is overblown; many IRS contacts are simply paperwork requests.
• “Audit” is often routine, not a “horror show.”
• The IRS is a human-run agency, often reasonable and open to dialogue.
• File your taxes even if you can’t pay the bill—filing and paying are separate actions.

“The very worst thing to do is to freeze and do nothing.” (Hannah Cole, [31:03])

6. What To Do If You Can’t Pay Your Taxes

Timestamps: [30:35]-[32:44]

• Always file your return, even if you can’t pay; partial payment reduces interest.
• States are generally less forgiving than the IRS—when in doubt, pay state figures in full and make a payment plan with the IRS.
• It’s possible to negotiate payment terms or request more time with both agencies.

“There's... like DIY payment plan... File your taxes, don't pay or pay as much as you possibly can because whatever you don't pay, you're going to have interest on.” (Hannah Cole, [31:03])

7. The Human and Social Justice Side of Taxes

Timestamps: [27:08]-[29:49]

• Taxes are an extension of community and a means to effect positive societal change.
• Tax advocacy and education are stepping stones to fairer laws; understanding taxes means citizens can better push for policy that benefits their communities.

“Money is not always a bad guy and that it is a real tool to create social change and have a bigger impact.” (Hannah Cole, [27:28])

8. Lesser Known Tax Benefits & 2025-2029 Tax Law Changes

Timestamps: [33:18]-[41:42]

• HSAs (Health Savings Accounts): Significantly expanded in the new tax bill for more people; offer full tax shelter on contributions and withdrawals for qualified expenses.
• Certain start-up credits for new businesses, especially for listeners starting with 1099 or partnership income, are highlighted.
• The new tax bill (“The Big Beautiful Bill”): Some short-term benefits (e.g., car loan interest deduction, expanded standard deduction for seniors), but many social and environmental programs reduced or eliminated.

“HSAs: it's an awesome, super amazing account that you get access to because you have really yucky healthcare... It gives you something really nice on top of something gross.” (Hannah Cole, [39:19])

Notable Quotes & Memorable Moments

• On Tax Shame:

  “I didn’t realize I was going to be like questioned on the existential level walking into this appointment.” (Hannah Cole, [08:01])

• On Tax Software:

  “Buyer beware, because they do have these little surprises and hook you into paying when you shouldn’t have to.” (Hannah Cole, [20:21])

• On Audits and IRS Communication:

  “The tax code is built for humans. It's not built for economic robots who do everything perfectly.” (Hannah Cole, [22:44])

• On Social Purpose:

  “If you had a little more knowledge... you could boost the money you already have, make it more, have a little rocket fuel behind it. And then you could spend more time and have a bigger impact with that amazing work you're already doing.” (Hannah Cole, [29:49])

• On Humanizing the Tax Experience:

  “If you can just be like, hey, I bet your day was a little hard. I hope you're doing okay. They're generally really nice and they'll work with you.” (Hannah Cole, [33:30])

Timestamps for Key Segments

• Hannah's story and origins of the book: [05:05] - [08:33]
• Debunking "tax burden" myth & taxes as investment: [09:18] - [10:54]
• The three-system approach to staying organized: [11:27] - [16:45]
• Bookkeeping logistics for new businesses: [17:04] - [18:34]
• Commentary on tax software traps: [18:34] - [20:21]
• Fear and reality of IRS audits: [21:23] - [22:44]
• Social justice, taxes, and financial empowerment: [27:08] - [29:49]
• Practical steps if you can't pay your taxes: [30:35] - [32:44]
• HSA expansions and new tax bill pros/cons: [36:17] - [41:42]

Lightning Round: Personal Touches (“Taxes for Humans” Rapid Fire)

Timestamps: [41:49] - [44:19]

• Last thing made with her hands:

  “Screen prints of T shirts and tote bags... they say human on them.” (Hannah Cole, [41:56])

• Tax season comfort drink:

  “When it's that bad, I think I usually go for a beer.” (Hannah Cole, [43:02])

• Favorite unapologetic business expense:

  “Business travel... it really helped my business.” (Hannah Cole, [43:18])

• A good tax preparer is: “empathetic.”
• What would she audit in our culture?

  “Our attitude about helping our communities, about being a part of a fabric and not just individuals.” (Hannah Cole, [43:58])

Final Thoughts

Farnoosh and Hannah underscore that understanding and organizing around taxes isn’t just about compliance—it’s about gaining power, peace of mind, and the ability to better use money as a force for good. Listeners are reminded that taxes impact every aspect of community life, and that developing a healthy view and habit set around taxes is both an act of empowerment and civic engagement.

Resource Links:

• Taxes for Humans Book Tour: sunlighttax.com/montclair

For freelancers, creatives, and anyone who has felt like an "outsider" in financial conversations, this episode is both a practical toolkit and a rallying cry: taxes are for humans, and you can master them—while shaping the world you value.