Here’s the latest Entrepreneur On Fire Podcast for your enjoyment!
January 2018 Income At-A-Glance
Gross Income for January: $205,842
Total Expenses for January: $66,463
Total Net Profit for January: $139,379
Difference b/t January & December: -$4,114
Why We Publish An Income Report
This monthly income report is created for you, Fire Nation!
By documenting the struggles we encounter and the successes we celebrate as entrepreneurs every single month, we’re able to provide you with support – and a single resource – where we share what’s working, what’s not, and what’s possible.
There’s a lot of hard work that goes into learning and growing as an entrepreneur, especially when you’re just starting out. The most important part of the equation is that you’re able to pass on what you learn to others through teaching, which is what we aim to do here.
**We’ll receive a commission on the affiliate links below.
Josh Bauerle’s Monthly Tax Tip
What’s up Fire Nation, my name is Josh Bauerle. I’m a CPA and the Founder of CPA On Fire, where we specialize in working with entrepreneurs to minimize their tax liability while keeping them in line with the ever-changing tax laws.
I’ve been working with JLD & Kate at Entrepreneurs On Fire for years now, and they’ve included me in these monthly income reports with unlimited access to all their accounts so I can verify that what they report here is complete and accurate.
And because they believe in delivering an insane amount of value to you, my job doesn’t stop at the verification level; I also provide a new tax and accounting tip every month!
Josh’s January Tax Tip: How to handle the 1099’s you receive
Well Fire Nation, it’s that time of year again: tax season.
As I prepare to go into my tax season hole to grind away at 500+ tax returns, I wanted to give you one last tip to make sure you don’t get hit with an unexpected IRS letter this year.
I want you to ensure the 1099’s you receive are addressed properly.
This may seem like a minor issue, but incorrect 1099’s are one of the biggest reasons we see clients get audited by the IRS.
What happens most often is one of the wonderful people who paid you money over the previous year sends you a 1099 made out to you personally instead of your business. Then, you claim it in the business, and the IRS thinks you failed to claim the income altogether since they expect to see it on your personal return.
Next thing you know, you’re receiving a love letter from the IRS demanding thousands of dollars for unreported income.
Here are a few scenarios that could easily cause this to happen:
- You switch your sole proprietor to an S Corp mid-year and either don’t update your clients who issue 1099’s, or they fail to make the change.
- Your business is a partnership, but your clients use your personal info for the 1099 not knowing the details of the entity.
- You mistakenly fill out your W-9 with your personal info instead of your business info because you weren’t quite sure what they were asking.
I’ve seen incorrect 1099’s issued for all the reasons above – plus many more.
Here are4 steps you can take to make sure you aren’t getting a surprise letter from the IRS due to an incorrect 1099.
1. Check every 1099 you receive to make sure it is issued to the right name and tax ID number.
Unless you are a sole proprietor using your SSN as the business tax ID, your name and/or SSN should never be used on the 1099.
2. If you find a 1099 incorrectly made out to you personally, immediately contact the person or company who sent it and ask them to issue a corrected 1099.
Make sure they send the corrected version to both you and the IRS.
3. If they refuse to issue a corrected 1099 (and some will) you’ll need to note it very carefully on your tax returns.
Assuming the 1099 was made out to you instead of the business, you will claim the 1099 on your personal return Schedule C, and then put an expense for the same amount with the description “Claimed on 1120’s (or whatever business return you file) EIN XX-XXXXXXX”.
Hopefully if you own a business you are using a professional for your taxes, in which case you can simply make sure they’re taking the steps above.
4. Now that we are into a new year, make sure that all your clients who issue 1099’s have your accurate W-9 on file.
You should have one on file at all times with the correct info so you can be sure you are giving new clients the correct info to prevent mistakes in the future.
No more love letters from the IRS, especially ones that could be avoided with some simple due diligence!
By making sure the 1099’s you receive are accurate you can drastically reduce your chances of receiving a nasty letter from our good friends at the IRS.
As always, please feel free to contact me if you’d like to discuss what would be best for YOUR business. I LOVE chatting with Fire Nation!
*Bonus* Claim your spot in Josh’s FREE Course on Business Entities!
David Lizerbram’s Legal Tip
How to Hire a Lawyer for Your Business – Part II
For Part I of this series check out our November 2017 income report
Sooner or later, every business is going to need legal representation. A lawyer can either be:
- An expensive line item, or
- A huge asset for your business.
As an entrepreneur, it’s up to you to make that choice.
If you haven’t hired a business attorney before, the process can be intimidating. I’ve seen the process many times, having been hired by hundreds of clients to represent them over the course of my career.
When the client (that’s you) is informed and knows what they’re looking for, there’s a much greater likelihood of having a positive result for both sides – the lawyer and the client.
Ultimately, we both want the same thing: a mutually-beneficial, long-term business relationship.
To help you achieve that result, I’ve put together this list: 7 Keys to Choosing the Right Lawyer for Your Business. (For the first 4 points, be sure to check out our November 2017 income report!)
5. Choose a lawyer who brings other resources to the table
Let’s be honest: good legal services aren’t cheap.
Here are some questions you can ask to help get the most bang for your buck:
- Does this law firm host regular events for their clients to meet and network? (These may take the form of live events, webinars, or other virtual resources.)
- Do they have a network of other attorneys and professionals they can refer you to when you have specialized needs?
- Are they members of trade associations or other groups you can benefit from?
- Are they willing to make introductions to other clients, potential customers, and strategic partners?
Don’t be afraid to ask these types of questions and dig for detailed answers. But approach this line of inquiry with a bit of skepticism: beware the attorney who over-promises.
Use your best judgment.
6. Do you need a lawyer in your city or state?
This one can vary depending on your specific needs.
Of course, it’s great to be able to meet face-to-face on a regular basis, but I find that even with my local clients, the vast majority of our contacts are through phone and email rather than in person.
If you live in a small town or a place without a lot of lawyers (how depressing!), you may not have easy access to a local attorney who has the skills and experience that you need. And often, that’s not really a problem.
Now, if your attorney has to go to court, he or she may have to live near you, or at least in your state. But for many business law needs, an attorney who lives in another state may be able to serve you just as well. This means that you can cast a wide net and seek out the best legal counsel for you.
So feel free to look for legal counsel outside of your geographic area, but be sure to let them know where you are and confirm that they’ll be able to handle the transactions you require.
- Tip: If your business has customers, vendors, or partners in another country, be sure to ask if the firm has relationships with attorneys in that country.
7. Make sure you’re comfortable with their fee structure
Your potential lawyer should not be afraid or nervous to discuss fees with you, and you shouldn’t be hesitant about bringing it up. Whether you’re a solopreneur or seeking legal advice for a big company, you still need to be able to plan for your legal costs.
Traditionally, most business lawyers work on an hourly basis. This means that each attorney has an hourly rate, and the attorney bills in increments of that rate (for example, 1/10 of an hour, with a minimum of 2/10 of any hour for any particular task.)
Some lawyers have moved away from hourly billing entirely and only bill a fixed amount for each service.
The most common approach is a hybrid of hourly and fixed fee billing, depending on the project. For example, if your business needs help with a complex contract negotiation, it can be very difficult for the attorney to estimate the amount of time involved, so billing based on the clock might make the most sense.
But if they’re doing the type of filing that they’ve done many times before, and they know pretty much what it’s going to take, both sides might be better off with a fixed fee for that project.
The most important part of this conversation is to be sure that the arrangement works for you, the client. If you prefer one or the other – hourly, fixed fee, or some other type of arrangement – be sure to communicate that to the attorney.
As long as you’re upfront about your expectations, he or she should be able to work with you; if not, this probably just isn’t a good match.
And that’s OK: as I said at the top, not every attorney-client pairing is a good match. Hopefully, applying these 7 Keys will speed up the process of finding the right match for you and your business.
Bonus Tip: This is not a “Till Death Do Us Part” decision.
Ideally, you’ll establish a relationship with a lawyer that will last for the life of your career. Maybe you’ll even become good friends. But just like with any other type of business relationship, there’s no way to know that on Day 1.
It’s possible the day will come when you have to tell your lawyer “It’s not you, it’s me.” Or whatever your preferred breakup line might be.
Nobody wants to hear this from a client. Believe it or not, lawyers are people too. We have feelings like anyone else. But, for the most part, we’re also professionals, and we know that not all client relationships are going to last forever.
If you get the feeling that you and your lawyer aren’t on the same page, the best thing you can do is pick up the phone and express your concerns. I suggest you avoid doing this over email – despite all the advantages of technology, when things get sticky, it’s best to talk it out whenever possible to avoid escalating the situation.
If you can get together in person, even better.
If that doesn’t work, and the situation just can’t be reconciled, your lawyer is, in most circumstances, obligated to return your files to you or forward them to your new attorney.
If you have funds remaining in the firm’s client trust account (also referred to as a “retainer account” or “IOLTA account,”) those must be returned to you as well.
If you have a legal question that you’d like me to cover on a future Income Report shoot me an email with your request! I’ll be sure to give you a shout-out when I join John & Kate to talk about your legal questions!
*Bonus* Download David’s FREE Checklist on Intellectual Property for Entrepreneurs!
What Went Down In January
Memoir is LIVE!
I’ve always loved biographies, and with Memoir, I have a great excuse to dive deep into the lives of the men and women who changed the world.
The first feature is Alexander the Great, and let me tell you, this man packed a LOT into 32 years.
We hired a Tech Marketing Strategist
Making the decision to hire a tech / marketing strategist on retainer was a big decision – and an even bigger investment.
We’ve always run a super lean team here at Entrepreneurs On Fire, and with our focus shifting towards unraveling the complexity of what our business has become, bringing another consultant on retainer on board wasn’t a quick or easy choice.
This brings our monthly consultant retainer to five (our CPA, our accounting team, our designer, our web guy, and our tech marketing strategist).
But one thing John said during the many conversations we had about hiring a strategist is that being good always keeps us from being great.
One month into our contract we’re feeling great about the decision, and we wasted no time getting straight down to business.
Since she came on board we’ve:
- Initiated a full website redesign (with the goal of making the UX 10x better)
- Focused in on our campaign conversions
- Started to revamp our quiz to more closely relate to our ideal customer
- Identified our top 5 focuses for the next 6 months
We’ll keep you posted as we continue on with these exciting projects, and be sure to check out JLD’s Facebook page every once in a while: that’s where we post behind-the-scenes looks at our active projects!
Product/Service Income: $153,835
TOTAL Journal sales: 882 Journals for a total of $32,992
The Freedom Journal: Accomplish your #1 goal in 100 days!
- TheFreedomJournal.com: $1,836 (38 Hardcovers & 12 Digital Packs sold!)
- Amazon: $16,068 (429 Freedom Journals sold!)
- Total: $17,904
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days! +2
- TheMasteryJournal.com: $1,671 (33 Hardcovers & 14 Digital Packs sold!)
- Amazon: $13,417 (382 Mastery Journals sold!)
- Total: $15,088
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $28,218 (237 monthly, 4 annual)
- New members: $14,814 (34 new members)
- Total: $43,032
Podcast Sponsorship Income: $72,500
Podcast Websites: $5,000 Your all-in-one podcast website peace of mind
Skills On Fire: $30
Free Courses that result in the above revenue:
Free Podcast Course: A free 15-day course on Podcasting
Free Webinar Course: A free 10-day course on Webinars
Free Goals Course: A free 8-day course on Setting & Accomplishing Goals
Funnel On Fire: A free 8-day course on Creating a Funnel that Converts!
Kickstarter On Fire: A free 5-day course on going from Idea to Launch on Kickstarter!
4 Days To Mastery: A Free 4-day course on how to master Productivity, Discipline & Focus!
Affiliate Income: $52,007
*Affiliate links below
Resources for Entrepreneurs: $37,682
- Audible: $512
- BlueHost: $600 (Step-by-step guide and 23 WordPress tutorials)
- Click Funnels: $25,741
- Coaching referrals: $2,747 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- Easy Webinar: $0
- Mentorship: $7,500
- ConvertKit: $356
- Disclaimer Template: $49 (legal disclaimers for your website)
- Fizzle: $128
- LeadPages: $0
- Infusionsoft: $0
- SamCart: $49
Courses for Entrepreneurs: $10,546
- Create Awesome Online Courses by DSG: $0
- Webinars that convert by Amy Porterfield: $485
- Copywriting Academy by Ray Edwards: $1,318
- 10k Readers by Josh Turner: $94
- The Amazing Seller by Scott Voelker: $0
- Self-Publishing School by Chandler Bolt: $8,500
- ASK by Ryan Levesque: $149
Resources for Podcasters: $1,949
- Pat Flynn’s Smart Podcast Player: $82
- Podcasting Press: $519
- Libsyn: $1,246 (Use promo code FIRE for the rest of this month & next free!)
- UDemy Podcasting Course: $102
Other Resources: $1,830
- Amazon Associates: $711
- Other: $1,119
Total Gross Income in January: $205,842
Business Expenses: $63,628
- Advertising: $14,674
- Affiliate Commissions (Paradise): $1,628
- Accounting: $849
- Cost of goods sold: $3,175
- Consulting: $0
- Design & Branding: $952
- Education: $15
- Legal & Professional: $560
- Meals & Entertainment: $475
- Merchant / bank fees: $1,190
- Amazon fees: $9,081
- Shopify fees: $36
- PayPal fees: $260
- Office expenses: $813 + 123
- Payroll Tax Expenses / Fees: $2,016
- Paradise Refunds: $2,573
- Promotional: $0
- Total Launch Package fees: $0
- Sponsorships: $11,500
- The Freedom & Mastery Journal: $5,000
- Travel: $2,555
- Virtual Assistant Fees: $4,523
- Website Fees: $1,630
Recurring, Subscription-based Expenses: $2,835
- Adobe Creative Cloud: $100
- Boomerang: $70 (team package)
- Brandisty: $24
- Authorize.net: $70
- Cell Phone: $202
- Google: $45
- Internet: $154
- eVoice: $10
- Infusionsoft CRM: $396
- Insurance: $551
- Libsyn: $258
- Manychat: $65
- Chatroll: $49
- Shopify: $176
- TaxJar: $19
- MeetEdgar: $19
- Taxes & Licenses: $523
- Interact Quiz Software: $89
- Zoom: $15
Total Expenses in January: $66,463
Payroll to John & Kate: $15,900
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report 🙂
Total Net Profit for January 2018: $139,379
Biggest Lesson Learned
Daily gratitude can go a long way
Have you ever had one of those days where everything is irritating and frustration is around every corner?
It doesn’t matter if you had a great night’s sleep, a kick-butt workout that morning, or the best breakfast in town – something just feels off.
It’s not only causing irritation with just about everything that’s going on around you, but it’s also affecting your productivity and motivation.
I’ve had more of these days over the past couple of months than I like to admit, and they aren’t fun. I don’t feel like ME, and I know it’s not the way I want to be living my life.
So I’ve done a considerable amount of research around this: what is it that makes these days different from others (besides the fact that I’m irritated and don’t feel very motivated?)
It’s my lack of gratitude.
It’s having a great night’s sleep, but neglecting to wake up and smile because of that.
It’s crushing a kick-butt workout, but then going on with my day like I’m owed that.
It’s making the best breakfast without taking the time to realize that not everyone can do that whenever they want.
So next time your alarm goes off and you wake up, crush a great workout, have an amazing breakfast, get to kiss your loved one, take a few minutes to call your parents up to tell them you’re thinking of them – don’t take it for granted.
Alright Fire Nation, that’s a wrap!
Until next month, keep your FIRE burning!
~ Kate & John
Note: we report our income figures as accurately as possible, but in using reports from a combo of Infusionsoft & Xero to track our product and total income / expenses, they suggest the possibility of a 3 – 5% margin of error.
This post was written by Kate Erickson, Content Creator and Implementer at EOFire. Follow Kate on Social:
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