July 2015 Income At-A-Glance
Gross Income for July: $348,203.90
Total Expenses for July: $90,580.50
Total Net Profit for July: $257,623.40
Difference b/t July & June: -$32,541.30
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 business owners 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 what you’re able to pass on what you learn to others through teaching, which is what we aim to do here at EOFire.
CPA On Fire
Our CPA, Josh Baurle, shares his July Income Report 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 EOFire to make sure their accounting systems are running smoothly and their taxes are as low as possible. John and Kate have included me in the 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, my job doesn’t stop at the verification level; I’ll also be providing tax and accounting tips to you along the way!
What Business Entity Should I Choose?
Far and away the most frequently asked tax questions I receive revolve around the topic of business entities.
What’s the difference between them and which one is right for you?
The two entities most of my answers come down are: LLC vs. S Corporation.
This month I want to do a deep dive into what the differences are between an LLC and an S Corp, and how to know which is right for you.
LLC: Limited Liability Company
First, let’s discuss the LLC, or limited liability company.
An LLC can be composed of one or more owners, and contrary to popular belief, it offers zero tax savings. In fact, there is no tax difference between a sole proprietor and LLC.
The LLC is what they call a pass through entity, which means the business itself pays no taxes. Instead, the profits in the business are passed through to the owners of the business, and they pay the taxes on their personal return.
Just like a sole proprietor, those profits are going to be hit with both ordinary taxes and the 15.3% self-employment tax.
The S Corp, like the LLC, is a pass through entity.
Where it differs is here: all the profits that are passed through to the owners are not subject to the 15.3% self-employment tax.
This is obviously a HUGE tax savings.
And because the tax savings are so large in some cases, the IRS tries to minimize them by requiring S Corp owners to pay themselves an actual salary, which they have to pay that familiar 15.3% tax on in the form of payroll taxes.
So, with an S Corp, the tax savings come from keeping your salary as low as legally possible.
But how much are we actually talking here?
Is it worth the small hassle of getting the S Corp and salary up and running?
Let’s take a look at an actual example and find out.
LLC vs. S Corp: An Example
Let’s say two different people own businesses that both make exactly $100,000 in profits.
Both owners are single with no dependents, no additional itemized deductions and they use the exact same CPA.
The ONLY difference between the two is Person A is operating his business as an LLC, while Person B is operating her business as an S Corp.
Come tax time, Person A calls his CPA and finds out he will owe a total of $31,230 in Federal taxes.
Person B calls the same CPA to find out she will owe a total of $23,052 in taxes on the exact same amount of income.
How much money will an S Corp save you?
If you are at around $100,000 in net business income, the move is worth $8,178 to you, and the more you make, the higher your savings will be.
So the last logical question is this: When should you begin considering making the move to an S Corp?
At $35,000 the move begins to make sense, and as I’ve said many times on these tax tips, if you’re making $40,000 or more in your business and you aren’t an S Corp, we need to talk because you’re throwing thousands of dollars away to taxes.
*Bonus!* Get instant access to Josh’s free video training course: 4 Finance Lessons Entrepreneurs Can’t Afford to Miss!
I’m always here as a resource if you have any questions! 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!
Fire Nation Feature
A couple of weeks ago I got an email from a guy named Mark Santiago, and let me tell you – Mark didn’t beat around the bush. His question to us: “Have you ever thought about outsourcing your email newsletter?”
I read through his email knowing that my answer to his question was, “No”, but then he said something that really stood out to me: “…so it’s hard to keep up with all the podcasts you create each week.”
This was a pain point Mark was sharing with us, and I’m always on alert for those.
After chatting with Mark about his story and his background going from email marketing to website flipping, and then taking a job managing email marketing for a non-profit (where he increased their revenue by 40%), to finally realizing that he’s an entrepreneur at heart and is ready to create something new, I realized Mark has something incredibly valuable he’s looking to share: recaps.
In the process of brainstorming ideas, Mark starting thinking about how there is so much content out there – and how there must be a way we can put it all together to benefit our audience.
That’s where Recap comes into play: What about a service that helps entrepreneurs recap their content so they can repurpose it in a powerful way and deliver it to their audience?
Mark gave us the idea to do just that for Fire Nation, and that’s why we wanted to share a great opportunity with you.
If you’re looking to repurpose your content in a powerful way, or if you’re ready to start thinking more about strategy and optimization when it comes to your email list, Mark is offering a free chat – no strings attached.
Schedule a time with Mark to learn about how Recap – and his expertise in email strategy and optimization – can serve you and your business!
What Went Down In July
A Work-cation in Maine
The past couple of years we’ve saved up our Maine-cation for September, which is when Rich Brooks hosts his conference Agents Of Change in Portland, ME.
This year, we opted to head East a little bit earlier for a couple of reasons:
1. So we could spend more time there (2 weeks to be exact); and
2. Because we unfortunately can’t make it to Agents Of Change this year :(
We were lucky enough to spend the 4th of July Holiday in Maine, and we celebrated America’s birthday with a YUMMY BBQ on the Lake.
Sometimes it’s not necessarily about “taking off from work”, it’s about switching up your routine, giving yourself a fresh atmosphere, and enjoying some good old work-life balance :)
Podcast Movement (& our Paradise meet up!)
Podcast Movement 2015 was EPIC, and we’ve got the post to prove it!
A Paradise Meet Up, a Keynote, a power dinner, lots of laughs, and a breakout session later, we were spent!
To check out our biggest takeaways from Podcast Movement 2015, head over to our recap post!
To watch John ROCK the stage, check out his talk that Pat Flynn graciously Periscoped… click here!
Fire Nation Elite turns 2!
It’s hard to believe we’re celebrating 2 years of Fire Nation Elite awesomeness this month! But when we take a look back on how far the Tribe has come since launch, it’s pretty incredible to see what we’ve built together.
What started out as a Tribe of 100 passionate entrepreneurs in July 2013 has continued to serve many on their journey to creating the business they’ve always dreamed of.
Austin Netzley, Justin Williams, Maritza Parra, Amber Hurdle, Anthony Tran, Christine Rose Elle, Frank Gustafson, Pam Moore, Jodi Flynn, Jason Benevides… we could go on to name a hundred other Elites who have experienced the power of a mastermind; but what we realized during our 2 year celebration is this:
Together, we’ve created a platform for like-minded entrepreneurs that not only provides resources to help those who are just getting started out on their journey, but we’ve created a platform that has allowed us to grow a family.
In fact, Amber captured it perfectly on her Instagram this past weekend at Podcast Movement:
Ready to join the Fire Nation Elite Tribe?
*Update: Fire Nation Elite closed Dec 31, 2015.
RescueTime is an incredibly powerful tool for anyone looking to manage their time more efficiently. In fact, John and I both attribute a huge chunk of our time management and efficiency skills to the RescueTime App itself.
Honing these skills starts with fully recognizing what it is you’re spending your time on, and most people don’t take the time to track this because it’s difficult to write down every single thing you do in a day.
With RescueTime, you have software constantly working behind the scenes to log your time for you. Simply, easy and so powerful!
Kate’s July: 176.5 hours (vs. 188.25 in June)
Kate’s top 3 sites for the month:
John’s July: 147 hours (vs. 195 in June)
John’s top 3 sites for the month:
We also have our teams’ contributions to add! We’re so grateful for each and every one of our team members, who without, we couldn’t be doing what we’re doing.
Our team includes 3 full-time virtual team members: JM, Jess, and Tipu!
Looking to hire your own Virtual Team?
Product/Service Income: $298,738
Podcasters’ Paradise: $162,152 (invoice total)
Create, grow, and monetize YOUR Podcast.
Free Podcast Course: $0 (it’s free :-)
A 15-day Podcast course on how to create, grow, and monetize YOUR Podcast.
WebinarOnFire: $13,937 (invoice total)
Create and present a Webinar that converts.
The Webinar Course: $0 (it’s free :-)
A 10-day Webinar course on how to create and present Webinars that convert!
Sponsorship Income: $110,191
Fire Nation Elite Mastermind: $9,313
Total Launch Package: $2,985
Podcast Launch (Audiobook on Audible): $80
Podcast Launch (eBook on Amazon): $55
Affiliate Income: $49,465.90
*Affiliate links below
- BlueHost: $4,200 (23 WP tutorials included with use of affiliate link)
- Ramit Sethi’s 3 Courses: $7,423
- LeadPages: $1,286
- Coaching referrals: $3,640 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- Tim Paige Voice Over: $430 (ask for the Fire Special)
- Audible: $192
- AudioBooks FREE Audio Book!: $0 (transition month from audible)
- Infusionsoft: $0
- Fizzle: $0
- Aweber: $143
- Amber Ludwig-Vilhauer: $390
- Easy Webinar: $0
- Fire Pole Marketing: $206
- Music Radio Creative: $0
- David Siteman Garland: $10,271
- Optimize Press: $0
- LifeOnFire: $979
- Rick Mulready’s FB ADvantage: $535
- Libsyn: $649 (promo code Fire)
- WP Curve: $180
- Optin Monster: $0
- Virtual Staff Finder: $0
- UDemy Podcasting Course: $184
- DotCom Secrets (free book): $6,812
- SendOutCards: $89
- Marketing Inc Course: $7,748
- ClickBank: $0
- Amazon: $1,352
- Other: $2,756.90
Total Gross Income in July: $348,203.90
Business Expenses: $88,619.50
- Advertising: $4,594 (includes Facebook ads)
- Affiliate Commissions (Paradise): $10,420
- Accounting: $250
- Design & Branding: $890
- Education: $416 (conferences included)
- Meals & Entertainment: $1,115
- Merchant / bank fees: $2,998
- PayPal fees: $1,495
- Office expenses: $1,067
- Software expenses: $23
- Libsyn: $276
- Other Business Expenses: $103 (promotional included)
- Paradise Refunds: $30,815 (invoice total)
- WebinarOnFire Refunds: $4,579 (invoice total)
- The Fire Path Refunds: $0 (invoice total)
- Fire Nation Elite expenses: $4,656.50
- TheMidRoll (Sponsorships): $18,365
- Total Launch Package Fees: $660
- Travel: $1,262
- Virtual Assistant Fees: $4,025
- Website Fees: $600
Recurring, Subscription-based Expenses: $1,961
- Adobe Creative Cloud*: $100
- Boomerang*: $14.99
- Authorize.net*: $91.10
- Cell Phone*: $180
- Internet*: $110
- eVoice*: $9.95
- Infusionsoft CRM*: $389
- Insurance*: $551
- Chatroll: $249
- ScheduleOnce*: $16
- Skype*: $2.99
- Spotify: $9.99
- Payroll fee: $77
- Workflowy*: $4.99
- MeetEdgar*: $49
- WPCurve*: $29
- Taxes & Licenses (recurring): $77
Total Expenses in July: $90,580.50
Payroll to John and Kate: $13,193
In our May Income Report, Josh focused on how to pay yourself as an entrepreneur. Check it out!
Total Net Profit for July 2015: $260,621.40
Lesson Learned In July
Not everyone knows what you know
In fact, it’s oftentimes quite the opposite!
Have you ever said this to yourself? “Well, everyone already knows that, so it’s really not worth me going over it/ sharing it / publishing it – it’s just so basic…”
I have – multiple times actually. But what we don’t realize as experts (or experts-in-training) in our industry or niche is that other people don’t always know what we know.
As I was preparing for my Podcast Movement talk, there were several times where I looked over my presentation and thought, “What if everyone in the audience already knows this about systems and processes?” I felt like I might be missing that big punch.
Guess what? I couldn’t have been more off with that assumption – I’ve never had so many people come up to me and thank me for sharing something before. The response was positively overwhelming, and because I took a chance and put it out there, I now know another major pain point that our audience has. And now because I know, I have to opportunity to help solve it.
Don’t be afraid to share what you know – because not everyone knows what you know.
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 Infusionsoft to track our product income, they suggest the possibility of a 3 – 5% margin of error.