Client Win: The $180,000 “Income” That Wasn’t — And the $40,000 Refund That Proved It

Let me tell you about a client who knew something was off.
Not because she’s a bookkeeper (she’s not), and not because she lives in spreadsheets (also no).
But because something didn’t smell right in her numbers.

She had six loans on the books. But all of them—every last one—were lumped into one liability account—well, the ones that the bookkeeper figured out were loans were in that liability account.

And the rest?
They hit income.
Yes… income.
As in: “Congratulations, you now owe taxes on borrowed money.”

If your jaw isn’t on the floor, it should be.

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The Red Flags She Noticed

She told me, “It just doesn’t make sense that all the loans are in one place.”
And she was right.

The books weren’t adding up because:

• Her loan accounts were never set up individually.
  
• Liabilities weren’t reconciled annually (I mean, this is bookkeeping 101).
  
• Her previous bookkeeper never asked what these deposits were for—and the deposits were obviously not income—they were five figure deposits!
  
• And the big one: $180,000 of loan deposits—money she did NOT earn—
  was categorized as taxable income on her prior year’s return

So yeah… she paid taxes on money she borrowed.
That’s the kind of thing that makes me want to walk outside and scream into the sky.

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What We Found (And Fixed)

Once we dug into everything, mapped out the loans, and reversed the bad entries, we finally got her books to tell the truth.

And here’s where it gets good:
Her new tax accountant filed an amendment…
and she’s getting over $40,000 back.

FORTY. THOUSAND. DOLLARS.
From simply having the books done the way they should’ve been done the first time.

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The Real Lesson

Listen, I don’t care if you hire me, another bookkeeper, or your cousin who swears he “took an accounting class once.”

What matters is this:
The most expensive bookkeeper you will ever hire is the one who does not understand your business, does not ask the right questions, and does not confirm anything with you.

Bad bookkeeping doesn’t just cost you stress.
It costs you real money.
Like-$40k-real money.
And that’s just this one example.

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If you’ve ever wondered if something in your books feels off… trust that gut.

You deserve books that tell the truth about your business, not ones that hand the IRS a bigger check than you owe.

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Ready for a bookkeeper who asks the hard questions before they become expensive mistakes?

Let’s get your books in order—accurately, cleanly, and with your sanity intact.

? Learn the must-ask questions with my free guide:
Tax Planning Questions to Ask Your Accountant
https://lktbook.kit.com/18dfe3818b

? Or get hands-on support with your bookkeeping:
https://lookoutbookkeeping.com/services

When your books are right, your business decisions (and your tax bill) follow. Let’s make sure they’re right.