Financial Moves Interior Designers Should Make Before Tax Day (With Morgan Boudreaux)

At some point in every designer’s career, there’s a slightly unsettling thought that pops up:

Am I doing this right?

Not the design part…you’ve got that.

I’m talking about the business part. The taxes. The numbers. The things no one really walked you through (and somehow everyone else seems to understand…or do they?).

And as tax season slowly creeps closer, those questions tend to get louder:

🔑  Am I doing this right?

🔑  Do I need to pay quarterly taxes?

🔑  What happens if I get audited?

🔑  Should I already know this?

The truth is, dealing with the financial side of your business isn’t as complicated (or as intimidating) as it feels. Most of the stress comes from not understanding how it all works yet.

That’s exactly why I recently asked Morgan Boudreaux, Vice President of Business by the Book, to give her expertise on the matter. She works specifically with interior designers, which means she doesn’t just understand accounting, she also understands how designers run their businesses.

“I think for a lot of designers,” I told her, “it’s not that we’re careless. It’s that we were never taught how to manage this side of the business in a way that feels approachable.”

Morgan immediately agreed. And more importantly, she normalized it.

You’re Not Behind. You’re Just Learning Something New

“One of the biggest things we work through with clients,” Morgan shared, “is the feeling that they’ve missed something or done something wrong.”

Sound familiar?

But her perspective is one worth holding onto: “You’re not behind. You’re just learning a different skill set…one that you were never formally taught.”

And honestly, that reframing does a lot of heavy lifting. Because when you stop viewing this as a failure and start seeing it as a new competency, everything softens a bit. You’re not scrambling; you’re learning.

This isn’t about mastering accounting overnight (no one is asking you to become a CPA by next Tuesday). It’s about building familiarity…one concept, one system, one habit at a time.

So take a breath. You’re doing better than you think.

The Two Things to Focus on Right Now

Instead of trying to tackle everything at once, I asked Morgan to simplify it: If a designer is feeling behind, what actually matters right now?

Her answer was refreshingly clear.

“First, talk to your CPA or financial planner about maximizing your retirement accounts. That’s something you can still adjust before the deadline.”

This is one of those things that feels very “future you problem”…until it isn’t. But it also has a very real present-day benefit: many retirement contributions are tax-deductible, which means they can lower your taxable income for the year.

In simple terms, you’re moving money into your future and potentially reducing how much you owe right now.

It’s one of the few areas where you can still make a meaningful adjustment after the year has ended, so it’s worth taking advantage of if you can.

And second, this one came with emphasis: “Set aside for your taxes every time you get paid. That money isn’t yours.”

We both laughed a little because it’s one of those things you know, but also one of the easiest things to ignore when everything is flowing through one account.

But here’s the reality: when sales tax sits in your operating account, it quietly convinces you that you have more money than you actually do. And that illusion does not age well.

A simple fix: Open a separate account and move sales tax immediately. No decision-making required. And “future you” will be thrilled.

And while we’re on the topic, sales tax isn’t the only thing that needs a clear boundary: income tax does too.

Whether you pay annual taxes or quarterly taxes, it’s smart to put that money aside every month so you have it when you need to pay your taxes.

The general rule is to set aside 25–35% of your income.

As we all know, if you don’t separate it as you go, it can start to feel like available cash…when in reality, a portion of it already belongs elsewhere.

There Doesn’t Have to Be This Panic

As April 15 approaches, it’s easy to feel like you’re running out of time. So I asked Morgan what designers should do if they’re not ready to file.

She didn’t hesitate: “File an extension. It’s totally normal. There doesn’t have to be this rush or panic.”

Immediate exhale.

But, just keep in mind that an extension gives you more time to file, not more time to pay. In other words, the IRS is flexible about paperwork, but not about their money.

So just because you have more time to submit your return doesn’t mean your tax bill is on pause.

Which is why Morgan recommends two very practical next steps:

1. Make an estimated tax payment

Even if you don’t know your exact number, sending in a reasonable estimate goes a long way.

Why this matters:
The IRS charges penalties and interest on unpaid taxes starting from the original deadline, not your extended one. So the closer your estimate is to what you actually owe, the more you minimize those extra costs.

And if you overpay slightly? That amount simply gets applied to your final return or refunded. No harm done. Think of it less like “getting it perfect” and more like showing good faith, and protecting yourself in the process.

2. Use the extra time wisely

An extension isn’t a free pass. It’s a window.It’s a chance to:

🔑  Clean up your books

🔑  Reconcile accounts

🔑  Track down missing expenses or receipts

🔑  Actually review your numbers instead of rushing through them

Because when everything is rushed, things get missed. And when things get missed, you either overpay…or create a bigger issue later.

“It’s better to do it correctly than quickly,” Morgan said.

The goal isn’t just to file—it’s to understand what you’re filing. So that next year, you’re not starting from the same place.

What Your Accountant Actually Needs

Part of the overwhelm is not even knowing where to start.

So I asked Morgan to break it down: what does your accountant actually need from you when it’s time to file taxes?

“If you’re organized,” she explained, “your CPA will want your financial reports: your profit and loss, balance sheet, and sales tax filings.”

In other words: the story of your business, in numbers.

And if you’re not organized?

“Then we build from the source documents: bank statements, credit cards, invoices, receipts. It’s more work, but it’s completely doable.”

Translation: you’re not behind, you just might be taking the scenic route.

The Numbers That Actually Matter

I told Morgan that sometimes I look at financial reports and have no idea what I’m looking at. So I asked, “Where should designers start if they feel confused when looking at their financial documents?”

Her response? “That’s my favorite question.”

Because, according to her, there are just a handful of metrics that really matter, and once you understand them, everything starts to click.

Here are four of her top metrics:

1 Utilization Rate: How much of your (or your team’s) time is spent on billable work

“You want your production team spending about 75–85% of their time on billable work.”

If it’s lower, it usually means time is getting lost to admin, inefficiencies, or things that feel productive but aren’t actually revenue-generating (we’ve all been there).

2 Effective Billable Rate: What you’re actually earning per hour

Even if your rate is $200/hour, if half your time is spent on non-billable work, your real rate quietly drops.

For example, you might have a $200/hour rate, but if half your week disappears into emails, sourcing, and “quick” admin tasks, your real rate is closer to $100/hour (which is usually not the number you had in mind).

Tracking your time can be a bit of a wake-up call (a helpful one, I promise).

3 Project Profitability (Gross Margin): What’s left after costs

For design services, Morgan recommends aiming for 85–90% margins. So if you charge $10,000 in design fees, ideally $8,500–$9,000 of that is retained as revenue to support your business.

On the flip side, if a project drops below ~20% profitability, that’s usually a sign that something isn’t working as intended.

For example, you might bring in $10,000 on a project, but after accounting for your time, team hours, and project-related expenses, you’re only keeping $2,000 (or less).

At that point, it’s worth pausing and asking:

🔑  Are we underbilling for the amount of time this actually takes?

🔑  Is scope creeping beyond what was originally agreed?

🔑  Did this project just get away from us a little?

Because occasionally it happens. But if it’s happening often, it’s not a one-off. It’s a pattern worth adjusting.

4 Accounts Receivable Timing: How long it takes clients to pay

“Anything unpaid after 15 days starts to impact your cash flow.”

Which means even a “profitable” business can feel tight if payments are slow. You can be doing everything right and still feel stretched simply because the money hasn’t hit your account yet. Timing matters more than we think.

The Habits That Quietly Start to Create Problems

We also talked about the patterns that tend to trip designers up. They usually aren’t in dramatic ways, but in small, compounding ones.

A few that come up often:

• Using one client’s retainer to fund another project (a slippery slope)
  It might feel harmless in the moment (especially if cash flow is tight) but it quickly blurs what money belongs to which project. And eventually, it creates gaps that are hard to untangle.
• Blurring personal and business expenses
  Grabbing a quick personal expense on your business card (or vice versa) seems small, but over time, it makes your financial statements harder to read and your tax prep a lot messier.
• Letting operating costs creep up without noticing
  Subscriptions, software, small recurring expenses—they add up quietly. Without regular check-ins, it’s easy to lose track of what you’re actually spending to run your business.
• Using platforms that make tracking complicated
  Convenience upfront often means confusion later, especially when transactions aren’t clearly documented or connected to your bookkeeping system.

Morgan explained that with platforms like Venmo, you can hold business funds directly in the account. This makes it very easy to turn around and spend that money, even on personal expenses, without a clear record. And that’s where things start to blur.

And while I understand the appeal of Venmo, she’s right. When money starts living in multiple places without clear tracking, things get messy quickly. 

At the core of all of this is one word: clarity. Knowing what money belongs where—and keeping it that way.

The Mindset Shift That Changes Everything

Toward the end of our conversation, I asked something I think a lot of designers feel but don’t always say: How can we become more confident talking about finances when it doesn’t come naturally?

Her answer was simple, and, honestly, really clarifying: “You’re not just an interior designer. You’re a business owner.”

That shift reframes everything.

Because yes, it comes with responsibility. You do need to understand your numbers well enough to make informed decisions.

But it also gives you permission to approach this differently. You’re allowed to ask questions. You’re allowed to not understand something the first time it’s explained. And you’re allowed to keep asking until it actually makes sense.

This isn’t about already knowing…it’s about being willing to learn.

“A good advisor will explain it in different ways until it clicks,” Morgan said.

Which is exactly what you deserve.

Tax Season Starts January 1

Finally, I asked the question we all think at some point: When should we actually be thinking about taxes?

Morgan laughed. “January 1,” she said. (Not the answer we were hoping for, but the one we probably needed.)

Because when taxes become part of your regular rhythm, they stop being this looming, once-a-year scramble.

As a bit of a recap, here are a few of the things you can do during the year to help you prepare better for tax season:

• Set aside 25–35% of income as you go
  Every payment gets split…some to you, some to the business, some to taxes. This creates a built-in system so you’re not scrambling to come up with a large sum later. It’s already been accounted for, little by little.
• Keep sales tax separate at all times
  So it never accidentally becomes “available funds” (a very convincing illusion). When it lives in a separate account, there’s no temptation (or confusion) about what you can actually spend.
• Check in monthly
  A quick review keeps things from piling up quietly in the background. It gives you a chance to catch small issues early, before they turn into bigger (and more stressful) ones.
• Meet with your CPA quarterly
  So you’re adjusting in real time, not reacting later. These conversations help you refine your estimates, make smarter financial decisions, and avoid surprises at year-end.

This isn’t about being perfect. It’s about removing surprises (the real source of most tax-related stress).

One Question Worth Asking

Before we wrapped up, I asked Morgan if she could share one question she wishes more designers would ask. 

Her response: “Are my design fees covering my business expenses?”

Because ideally:

🔑  Your design fees cover your operating costs: things like your salary, team time, software, rent, and day-to-day expenses.

🔑  Your product markup becomes profit—not something you rely on to keep the business running.

In other words, your business should be able to stand on its own before product sales are factored in.

For example: Let’s say your monthly business expenses total $15,000.

If your design fees bring in $15,000 (or more), your business is covered—and any product markup becomes additional profit

But if your design fees only bring in $8,000, you’re relying on product sales to make up that $7,000 gap

And that’s where things can get risky. Because product revenue isn’t always predictable. Timelines shift, orders get delayed, and clients change scope. And suddenly, the part of your business that was supposed to be a profit is now just keeping things afloat.

If that’s happening, it’s not a failure; it’s a signal. A signal that your pricing, structure, or time allocation might need adjusting.

And the sooner you can see that clearly, the easier it is to fix.

A Final Thought

After our conversation, one thing felt very clear: This isn’t about becoming a “numbers person.” It’s about becoming a more informed business owner. And if April 15 is approaching and you’re not entirely sure where you stand, you’re not alone.

“But there doesn’t have to be panic around this,” Morgan said assuredly. 

You don’t need to fix everything overnight. You just need to take the next step toward clarity. 

And if you want a simple place to start?

Move your sales tax out of your operating account and create a separate account for it. It’s simple. It’s slightly annoying. And it will make your life significantly easier.