Money Matters: Celeste Johnson, Founder of KO Tax & Financial Services, Has Tips to Keep Your Affairs in Order
MEET Celeste Johnson: In 2008, at the heart of the recession, Celeste O. Johnson decided to leave her job at H&R Block. Using a little more than $15,000, Celeste took her 17 years of executive-level and instructor income tax preparation experience and started her own business, KO Tax & Financial Services. In 2012, KO Tax & Financial Services reached 600 clients and $100,000 in revenues. Through KO Tax & Financial Services, Celeste provides a broad range of services to individuals and small businesses, including accounting, tax and business consulting services. In addition to helping individuals and businesses save tax dollars, this registered tax return preparer is also a member of the National Association of Tax Professionals and the National Society of Tax Professionals.
MN: How did you get started working with H&R Block?
CJ: I took the H&R Block course in 1995 with the intention of starting my own tax business. When I reached out to my family and friends, hoping they’d become my first customers, they were reluctant to have me look at their personal finances. So, I abandoned my business idea and started working with H&R Block. I was hired as a tax preparer, assigned to an office in Midtown Atlanta. After my first year with the company I was promoted to assistant office manager. From there, I got promoted into several more senior positions, including PR coordinator, instructor, trainer, area manager, regional office assistant and eventually manager of my own H&R Block office. I ended up staying with the firm for 13 years before I actually started my own business.
MN: What services do you offer clients that they can’t get from one of the software tax programs? And do you work mainly with individuals or businesses as a tax accountant?
CJ: I offer my clients one-on-one tax knowledge, providing them the opportunity to understand tax laws and codes as they relate to the taxpayer. KO Tax & Financial Services is a year-round office so we can stay in contact with our clients if there are tax law changes that will affect their taxes. We also instruct small business owners on how they should re-construct their business model to be in compliance with the tax changes. Other services we offer individuals and small businesses include maintaining tax records and other financial records. We also offer our clients bookkeeping and financial planning services.
MN: Did you think owning a business would be easy, that you would earn lots of money quickly?
CJ: Yes, I was like most other business owners. I wasn’t quite prepared for the day-to-day behind-the-scenes things that can happen once you start your own business. However, my belief in entrepreneurship and its benefits, combined with my strong work ethic, help me maintain a realistic approach as a business owner. I also focus my efforts on each day’s events and make time for prayer. There are times when my resolve is challenged. But, I don’t give up. This is my dream. My strong motivation to succeed and my passion for what I do — helping others while providing for my family — also propels me forward.
MN: Tell us about three steps business owners can take to make the process of reporting and filing their taxes easier?
CJ: Step 1: Every month reconcile your books and bank statement. Design a spreadsheet to track your spending as well as the amount of income your business receives. Also, set up two bank accounts, one to track operational costs, another to track payroll expenses.
Step 2: At the end of every three months create a financial statement for your business. Notice if you have a profit or a loss within the quarter. If you show a quarterly profit, you need to send in estimated payments to the Internal Revenue Service (IRS). The estimated payment is generally about nine to 13 percent of your profits for the quarter.
Step 3: Stay aware of your bottom line. While you are reviewing your quarterly profits and losses, make note of what you are spending most of your money on. If you show an overall loss for the quarter, consider cutting back on one or more expenses. That, or you can find other ways to increase the amount of revenue that’s coming into your business.