For independent planners, tax season can be a time of stress, confusion, and unexpected expenses. Being self-employed offers independence, but it also comes with its own set of challenges — tracking expenses, maintaining cash flow, avoiding liability, and planning ahead so that there’s no penalty at tax time.
Known as “The Tax Translator,” Steve Hoffman, a former IRS Agent for 15 years who specializes in tax advice for universities, has some answers for independent planners at this time of year.
Skift Meetings: What is the biggest challenge for independent planners, when it comes to taxes?
Withholding. The typical employee gets half of their Social Security tax paid by his or her company. The Social Security tax rate is 12.4%; the employer pays 6.2% and the employee pays 6.2%. But the self-employed planner must pay the entire 12.4 %, plus pay the full 2.9% of the Medicare tax.
So self-employed independent planners must pay 15.3% of their net earnings to Uncle Sam. And then they have to pay the federal income tax on their net earnings too.
What are some common mistakes self-employed people make when it comes to their taxes?
A big one is mileage. The current business mileage rate for use of your personal car in 2025 is 70 cents per mile. So if you traveled 300 miles putting together an event, that’s $21 of reimbursable expenses to you. That adds up over the course of a year.
I keep a small book in my car and record every business trip, the starting and ending mileage, and who I met with. If you are audited, you can’t re-create that information, and you can be audited by the IRS for expenses from up to three years ago.
The other is to keep receipts. If you buy a computer for $1,000 and are audited and can’t produce a receipt, the IRS will remove that deduction off your taxes. This will make your net income go up, so you will owe more in income taxes. And if it’s your 2022 taxes that are being audited, let’s say, you will owe interest on that unpaid income tax all the way back to 2022.
What happens if a planner doesn’t file estimated taxes?
The IRS does not want to wait until you file your taxes by April 15 of the following year, so they came up with quarterly estimated payments. (The deadlines for these in 2025 are January 15, April 15, June 15, and September 15.)
But a lot of planners find themselves in a situation where they have other expenses that are more pressing, and they don’t file their quarterly estimated taxes. The best thing to do is to make a payment, even if it’s not the full amount, because the IRS will charge you interest on the unpaid taxes, which will continue to build.
What if you can’t get your taxes together by April 15?
You can file an extension. But remember, the extension is only of the time to file — not an extension of time to pay. If you feel you will owe tax when you file your federal tax return, then you should make a payment before April 15. You can make the payment when you file the extension. If there’s a balance due when you file your return, you will receive a penalty from the IRS.
Is it important for independent planners to set themselves up as LLCs?
I recommend incorporating to protect your personal assets from any liability that might be caused by lawsuits. If an attendee trips over a cord on the floor, they are going to include the planner in the lawsuit. Incorporating will protect your personal assets, like your house, car, and bank account, from the lawsuit. I recommend incorporating as a Limited Liability Corporation (S-Corp), rather than a general corporate organization (C Corp). Tax preparation fees are much lower with the S Corp.
Should independent planners meet with their accountants more than once a year?
I recommend meeting with them around July 1 of each year. This will update you on any tax law changes that may benefit you, and you can let the accountant know what you are doing that might impact your taxes (marriage, divorce, a new child, that you bought a house, etc.). Taxes are more than a once-a-year thing.
