January 2022 Income At-A-Glance
Gross Income for January: $215,205
Total Expenses for January: $26,721
Total Net Profit for January: $188,484
Difference b/t January & December: -$8,764
% of net profit to overall gross revenue: 88%
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.
Check out all of our monthly income reports – from the very beginning!
**We’ll receive a commission on the affiliate links below. If you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Ron Parisi’s Monthly Tax Tip
What’s up Fire Nation, my name is Ron Parisi. I’m a CPA and Managing Member 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.
Our firm has 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!
Ron’s January Tax Tip: Preparing for tax season as an entrepreneur
We are in the heart of tax season, which means you’re thinking A LOT about your taxes. Today we are going to talk about tax filings, deadlines, and obligations, and how to best prepare for your accountant to make tax season as enjoyable as possible!
March 15th – filing deadline for partnerships and S-Corps
April 18th – filing deadline for C-Corps and personal tax returns
Tax liabilities for 2021 still need to be paid by April 18th, regardless of if you have filed for an extension. First quarter estimates for 2022 are also due by April 18th, so keep that in mind.
Preparing for your Accountant
We have compiled a list of things that you should be sure to give to your accountant when going to them to get your taxes filed.
- Your business’ 2021 profit & loss statement, 2021 balance sheet ,and December 2021 / January 2022 bank statements.
- All 1099’s you received – that would include the forms 1099-MISC, 1099-NEC, 1099-K, 1099-INT, 1099-DIV, 1099-R, 1099-B, etc.
- All W-2’s received by you and our spouse, if applicable.
- Any paperwork about your stimulus payments or the Child Tax Credit distributions. These will come as separate documents from the IRS if you received both types of payments.
While this list is a great start, it still might not capture everything that your accountant will need.
Also, this is the first year that there will be additional disclosures that need to be made on your tax return regarding cryptocurrency. So be ready to disclose that information to your accountant.
The 3 Year Statute of Limitations for tax returns: while this statute of limitation covers a lot, it does not cover everything. The IRS can open this statute for 1) substantial underreporting of income and 2) incomplete tax returns beyond the 3 years.
It is so important to make sure you accurately file your taxes.
For those of you in Fire Nation who are entrepreneurs and business owners and are looking to upgrade your financial operations going into 2022, check out our website: CPAOnFire.com!
We’ve been able to get our clients amazing results and would love to help you out as well. Book a call through our website and let us show you how we can help your business grow.
David Lizerbram’s January Legal Tip: How to terminate a contract
Every business owner enters into a contract hoping that it’s going to work out perfectly and they’ll never need to terminate it.
But often, for a variety of reasons, there’s a need to take action to bring a contract to a close. This is true whether you’re working with an independent contractor or a large company.
I’ve found that some clients have never put much thought into the contract termination process. As with most things, it’s best to start at the beginning. When you’re actually negotiating the contract, take the time to consider why you might need to get out of the agreement, and what that might look like.
If you’re working with an experienced business attorney, they will probably have a good idea what to consider at this point.
But let’s say you didn’t give those clauses a lot of consideration, and now you’re down the road and need to figure out your best move. Now it’s time to carefully review the document and see what your options are.
Everything in this blog post should be considered only a general description of common contract terms. Be sure to consult your own legal counsel as to the specifics of your situation.
3 Types of termination clauses
Business contracts often have some combination of three different types of termination clauses:
- termination for cause,
- termination for convenience, or
- termination based on time.
Termination for cause means you are allowed to leave the contract based on the act or omission of the other party. This could range from breach of contract to a simple failure to deliver on certain obligations. The contract might say, for example, that you can terminate the contract if the other side hasn’t sold X widgets by Y date. Well, if Y date has come and gone, and X widgets haven’t been sold, then you can most likely terminate for cause.
Termination for convenience means that one or both parties can bring the contract to a close for no reason at all. In an employment context, this would be referred to as “at-will”. If the contract gives you the right to terminate for convenience, you can choose to do so whenever you wish.
Termination based on time means the contract comes to an end at a certain predetermined date. Always review this type of clause carefully, because many contracts will say, for example, that it’s a one-year contract, but that it automatically renews for additional one-year terms unless you provide notice that you don’t want it to renew.
Any type of termination clause will often have procedures associated with it.
For example, you may have the right to terminate with 30 days’ written notice. Make sure you understand what “written notice” means. Some contracts still require notice by mail, or by messenger service (like FedEx or UPS). Other clauses will list a variety of acceptable forms of notice, including email and even fax.
When you’re taking action to terminate a contract, it’s worth making sure all these details are handled properly.
You should also review any penalties that the contract may impose for early termination. This could be referred to by a variety of terms, including early termination fees and liquidated damages.
What if the contract doesn’t have a termination clause?
Or maybe it’s time-based, but the termination date is a long way away and you need to get out of the contract early?
You may still have options.
In some cases, contracts can be terminated based on “frustration”. This means that the terms are impossible for you to fulfill.
Be very careful about this — “impossible” doesn’t just mean “I don’t want to do it” or “it’s not as profitable as I thought it would be”.
Many contracts include a force majeure or “Act of God” clause that allows one or both sides to get out of the contract based on factors outside of their control (such as war, natural disaster, or a pandemic, to be more topical).
Even if there is no written “termination for cause” term, if the other side has breached their contractual obligations, that may give you the opportunity to terminate.
Typically a minor breach (like paying a day late) isn’t sufficient to terminate for cause; the breach usually has to be “material”, meaning it’s significant enough to strike at the heart of the contract, and even in the case of a material breach, the other side often has the opportunity to “cure” or fix the breach within some reasonable amount of time.
As you can see, the best approach is to take your time to go over all of these possible scenarios before signing the contract, so you’re prepared for the foreseeable twists and turns.
But if you find yourself in a contract that’s not working out, don’t despair, you may still have options.
If you need help getting into or out of a contract, feel free to contact me.
What Went Down In January
JLD talks NFT’s, Cryptocurrency, and more!
Love it or hate it, web 3.0 is here.
Personally, I love it.
I was both young and broke for web 1.0 and web 2.0, but now I am well into my adult years with some disposable income and I am fully participating in the web 3.0 revolution.
Bitcoin, Blockchain, Crypto, smart contracts, NFTs and the Metaverse are here to stay.
There will be a lot of losers, and some amazing winners.
Living in Puerto Rico, (and what some have recently been referring to as Crypto Rico), has meant I am surrounded by people who are massive web 3.0 maximalists, (along with more than a few haters, aka minimalists).
I am having a lot of fun diversifying my portfolio with Crypto, NFTs and owning land in the Metaverse’s that are now being created.
There are a lot of challenges ahead in this space as governments are looking to preserve their power with regulation, so the risks are high – and so will be the rewards and losses.
The world is moving in this direction whether we like it or not, and my unsolicited advice is to arm yourself with knowledge and form your own conclusions that are best for you, your family, and your future.
Fire Nation, the future is HERE!
We’ve already shared some great tips from Ron and CPA On Fire up top in this report about preparing for tax season. In addition, I thought I’d share a bit about how we’re preparing on our end for 2021 taxes.
I believe it starts with organization. This is a big deal for me, because there’s nothing that drives me more nuts than remembering I had something, but not knowing where I put it.
So to start, I’ve created a folder in Dropbox simply named “2021 taxes”.
This folder gets shared with our CPA’s, bookkeeper, and myself and John.
Anytime we receive an email or a piece of physical mail that has to do with taxes, it gets uploaded into that folder based on the type of document it is – on the spot:
- 1099 forms
- Kate’s personal tax forms
- John’s personal tax forms
- Business tax forms
Over the past couple of weeks – and for the next couple of months ahead – you’re going to be asked for a lot of stuff. Having one place you can go to find everything you need is not only helpful for you – the business owner – but also for your entire tax team.
In addition, we make sure our monthly reports are always up to date and settled in Xero, which is the online accounting software we use for Entrepreneurs On Fire.
By labeling transactions – both money in and money out – throughout the year, we save ourselves (and our bookkeeper) a ton of time come the end of the year. No going back and guessing what that $275 was for, or why a business you don’t recognize paid you $500 way back in April 2021.
These two tips might seem simple, but they’ll go a long way in helping you stay sane throughout tax season!
Product/Service Income: $201,408
TOTAL Journal sales: Total Journals Sold 219 – $7,647
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Total: $2,251 (66 Freedom Journals sold)
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- Total: $1,535 (47 Mastery Journals sold)
The Podcast Journal: Idea to Launch in 50 Days!
- Total: $3,861 (106 Podcast Journals sold)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $9,003 (96 recurring)
- New members: $970 (10 new members)
- Total: $9,973
Real Revenue: Turn your BIG IDEA into Real Revenue
- Total: $150
Podcast Sponsorships: $183,550
Free Courses that contribute to the above revenue:
Your Big Idea: Discover your big idea in under an hour!
Free Podcast Course: Create and launch your own podcast!
Funnel On Fire: Create a funnel that converts!
Affiliate Income: $13,797
*Affiliate links below – if you click on my affiliate link and sign up for the products and services I trust and recommend, then I will earn a commission.
Resources for Entrepreneurs: $10,002
- Audible: $43
- Bluehost: $0
- Click Funnels: $9,783
- CovertKit: $176
- Coaching referrals: $0 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
Courses for Entrepreneurs: $0
Resources for Podcasters: $2,649
- Podcasting Press: $21
- Podcast to Profit 2.0: 2,363
- Splasheo: $74
- Fusebox: $99
- Libsyn: $0 (Use promo code FIRE for the rest of this month & next free!)
- Repurpose House: $45
- UDemy Podcasting Course: $47
Other Resources: $1,146
- Amazon Associates: $118
- Other: $1,028
Total Gross Income in January: $215,205
Business Expenses: $24,858
- Advertising: $0
- Affiliate Commissions (Paradise): $896
- Accounting: $0
- Cost of goods sold (Journals): $1,229
- Consulting: $88
- Design & Branding: $0
- Dues & Subscriptions: $0
- Education: $35
- Fulfillment (Journals – May – Dec 2021): $4,762
- Legal & Professional: $
- Meals & Entertainment: $560
- Merchant / bank fees: $2,045
- Amazon fees: $2,924
- PayPal fees: $575
- Office expenses: $384
- Community Refunds: $433
- Promotional: $1,500
- Travel: $5,483
- Virtual Assistant Fees: $3,850
- Website Fees: $94
Recurring, Subscription-based Expenses: $1,863
- Adobe Creative Cloud: $100
- Audible: $16
- Boomerang: $50 (team package)
- Authorize.net: $38
- Google: $49
- Glow.fm: $5
- Bonjoro: $45
- Cell Phone: $186
- Internet: $40
- eVoice: $12
- Infusionsoft CRM: $241
- Pandora: $45
- Insurance: $89
- Libsyn: $188
- Linktree: $6
- Loom: $96 (annual fee)
- TaxJar: $19
- Taxes & Licenses: $523
- Zoom: $55
- Xero: $60
Total Expenses in January: $26,721
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 2022: $188,484
Biggest Lesson Learned
Take time now; save time later
In the moment, setting aside time to document, create a process, or file away important paperwork might seem like hassle. We’ve all experienced that pileup on our desk that keeps growing and growing, or when your desktop keeps getting more and more cluttered with those pesky little icons…
And because it’s tax season, it has become exponentially apparent how critical it is to take time now in order to save time later.
We shared a little bit about our filing system for tax paperwork and documents earlier in this report, and it’s a prime example of taking a couple of minutes “in the moment” to upload a document, or file away some papers that will pay you back tenfold in the future when it comes time to find that stuff.
Imagine your CPA asking you for all of your 1099’s, and instead of rummaging through piles of paperwork – or worse, a stack of unopened mail on your desk – you can just share a Dropbox folder with them.
This extends way beyond tax season. We have folders and a virtual filing system like this for everything in our business. Logos, social media assets, templates for our sponsorships – you name it.
It doesn’t happen all at once, and it certainly won’t happen overnight. But if you take one thing away from this month’s income report, let it be this: take time now in order to save time later – not just during tax season, but all year!
It’ll save you stress, frustration, and give you loads of peace of mind moving forward.
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.