Hi. I'm Marabna Agarwal.

I am a CPA,

and my goal is simple,

to help everyday people understand taxes without fear,

confusion, or jargon.

Let me describe a situation

I see all the time.

A business owner says,

I have money still in my bank account.

I never took it out,

so why do I still owe so much in taxes?

And the confusion is real

because cash feels like profit,

and if you didn't take it out,

you assumed

that there was no profit.

But for tax purposes,

cash and taxable income

are not the same thing.

Here is the biggest misunderstanding.

People assume if the money hasn't left my bank account, I should not owe any taxes.

unfortunately, the IRS does not think that way.

The IRS does not check your bank balance

before deciding

how much tax you owe.

Taxes are based on income,

not cash,

and those two can move

very differently.

Let's break this down simply.

Your business can show a profit on paper

even if you did not take any money out

even if the cash is sitting in the business.

Why? Because profit includes things like revenue you earned, expenses

you deducted,

timing difference.

The IRS taxes

what you earned,

not how good you feel looking at your bank account.

Here are the most common reasons I see.

Number one, reinvesting

does not avoid taxes.

Buying equipment,

saving for growth, or keeping cash in the business does not automatically

reduce taxable income.

Loan proceeds feel like income, but they are not.

Loans

increase cash, but they are not taxable.

Meanwhile, real income quietly creates tax.

Owners forget about self employment tax.

This one hurts the most.

You're not just paying income tax.

You're paying both sides of Social Security and Medicare.

The IRS

holds that fair.

Business owners

call it

surprising.

Another big reason,

cash rich owners get shocked, estimated taxes.

Business income

usually does not have withholdings. So the IRS expects you to pay taxes quarterly based on what you are earning throughout the year. If you wait until April, the IRS does not say thank you for paying. They say you paid late, and then penalties quietly show up. This is the sentence

I hear constantly,

but I didn't take distribution. That does not matter. If your business earned the income, the tax follows the income, not the distribution, especially for sole proprietors, partnerships,

s corporations.

The IRS taxes your share,

not your withdrawals.

What smart business owners do differently, they project income

before

year end.

Set aside

tax money

intentionally,

use entity structure

strategically,

understand timing of deductions and income.

This isn't about avoiding taxes.

It's about

avoiding surprises.

Being cash rich does not mean you're tax ready, and owing taxes does not mean your business failed. It usually means your business grew. The IRS does not tax comfort.

They tax income,

and business owners who understand that stop being shocked by tax bills

and start planning for them.

Thanks for watching.

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