🚀 Module 8: Banking, Taxes, & Entity Setup

Simple, clean financial foundations.

⏱️ 60–90 minutes Difficulty: Beginner
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By the end of this module, you’ll have a clear business entity, a dedicated bank account, and a system to keep your taxes organized—removing financial stress so you can focus on helping clients.

2. Why It Matters

Many health coaches struggle because they mix personal and business finances. Without a proper entity and tax plan, you risk confusion, missed deductions, and legal exposure. Clean financial foundations not only protect you but also make your business look professional to clients, banks, and future partners.

3. Step-by-Step Guide

1

Choose Your Entity Type

For most new health coaches, starting as an LLC provides liability protection and tax flexibility. Sole proprietorship is simpler but riskier.

Pro Tip: Use your state’s Secretary of State website—it’s usually cheaper than third-party filing services.
2

Get an EIN

Apply for a free Employer Identification Number (EIN) from the IRS. This separates your personal Social Security Number from your business.

Pro Tip: Apply directly on the IRS site—it’s free and instant.
3

Open a Business Bank Account

Bring your LLC paperwork and EIN to your bank and set up a business checking account. Keep personal and business expenses separate.

Pro Tip: Many online banks (e.g., Relay, Novo) let you create sub-accounts for taxes, savings, or marketing.
4

Set Aside Taxes

Move 20–30% of each payment into a “Tax Savings” account. This prevents year-end surprises and builds financial discipline.

Pro Tip: Automate transfers so every time you’re paid, a percentage goes straight into your tax account.
5

Track Income & Expenses

Use simple software (QuickBooks, Wave, or even a spreadsheet) to log every transaction. This creates clarity and maximizes deductions.

Pro Tip: Snap photos of receipts with your phone and upload them—no shoebox filing needed.

4. Examples & Options

Example: Sarah, a wellness coach, formed an LLC and opened a business account. She pays herself a monthly transfer to her personal checking. At tax time, everything was already tracked and deductible—saving her $3,000.

DIY (Free)

File your LLC directly with your state, use IRS.gov for EIN, track expenses in Google Sheets.

Mid-Level

Use a filing service (LegalZoom, ZenBusiness), QuickBooks Simple Start, and an online bank like Novo.

Advanced

Hire a CPA for setup + bookkeeping, use Gusto for payroll if you pay yourself regularly, and tax automation software.

5. Common Mistakes to Avoid

  • Mixing personal and business funds → Instead, keep a dedicated account.
  • Waiting until tax season to organize receipts → Instead, log expenses weekly.
  • Overpaying for filing services → Instead, check your state website first.
  • Not setting aside taxes → Instead, automate savings every month.

6. Quick Win Highlight

💡 Quick Win: Open a free online “Tax Savings” account and set up an automatic transfer of 20% from your next client payment.

💬 DM Prompt
“Hey [Name], just opened my new business bank account—feels official! Have you set yours up yet?”
Mark Complete ✅

7. Mini-Implementation Exercise

Entity & Banking Checklist

  • [ ] I chose my entity (LLC/Sole Proprietor).
  • [ ] I applied for my EIN.
  • [ ] I opened a business bank account.
  • [ ] I created a tax savings account.
  • [ ] I picked a system to track expenses.

8. Tools & Resources

RocketLawyer

Affordable LLC filing + EIN number.

Relay/Novo Bank

Online banks with sub-account features for taxes and savings.

QuickBooks / Wave

Reliable bookkeeping software for small businesses.

ZenBusiness

Affordable LLC filing + compliance reminders.

Gusto Payroll

Run payroll for yourself or staff, handle tax filings automatically.

9. Checkpoint / Success Criteria

✅ Entity registered (LLC or Sole Proprietor)
✅ EIN obtained
✅ Business bank account open
✅ Tax savings system in place
✅ Expense tracking method chosen

10. Summary & Next Step

  • Set up your legal entity (LLC is best for most coaches).
  • Open a dedicated business bank account.
  • Separate and save taxes automatically.
  • Track income and expenses weekly.
Next → Module 9 Coaching Agreement & Policies