July 2020 Income At-A-Glance
Gross Income for July: $170,492
Total Expenses for July: $33,052
Total Net Profit for July: $137,440
Difference b/t July & June: +$5,298
% of net profit to overall gross revenue: 81%
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. 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.
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 July Tax Tip: Is a Monetary Gift Taxable?
Starting a business can cost a lot of money. While there are many Internet based businesses that cost very little to start (like a podcast!), there are still many others that can cost you six figures or more.
For most people those startup funds come from one of two sources: either you have the money on hand, or you take out some type of loan.
But for some, there are generous people in their life willing to help them out with those startup funds, or home buying funds, or funds for any other purpose in the form of a gift.
And every year, I get multiple questions along the lines of “my great Uncle Leonard gave me a monetary gift to get my business started; does he get a tax deduction for that?”.
And that always leads to me giving some bad news.
Not only is the gift not a tax deduction for Great Uncle Leonard, it could be taxable to him!
That’s right, a gift could be taxable to the person giving the gift – not the person receiving it.
If the gift is over $15,000 to a single person, the person giving the gift will have to fill out a gift tax return and potentially pay taxes on it.
Can the giver avoid paying taxes on a monetary gift?
Yes, the good news is there are several ways to avoid paying any taxes on that gift.
Here’s a rundown on ways you can give or receive large gifts without anyone paying any taxes on it.
- The $15,000 limit is per person.
This means if you are married and/or the person receiving the gift is married you can double or quadruple the tax free gift amount.
Here’s an example: If a married couple wants to give a large gift to their son who is married, they can give up to $60,000 tax free. The Dad can give $15,000 to his son and another $15,000 to his son’s wife, and then his spouse can do the same.
No gift tax return would need to be filed and no gift taxes would need to be paid.
- You can take five years worth of gift exclusion for a single person all at once.
This means you can give $75,000 to a single person in a single year with no taxes owed.
You would then not be able to give the same person another gift for the next five years without possibly incurring taxes.
You would also still have to file a gift tax return in this scenario and make the election of the five year spread. But you would avoid any gift taxes being paid.
- You can use the lifetime gift tax exemption of $11.58 million to avoid paying any gift tax.
This eliminates most every day people from ever needing to actually pay taxes on any type of monetary gift.
But there’s two things to note on this lifetime exemption.
First, you still have to file a gift tax return if you exceed the $15,000 gift per person, per year; you will just make the lifetime exemption on the return.
And more importantly, this is a part of the estate tax exemption, meaning any gift you put towards the $11.58 million lifetime gift exemption will reduce your tax free estate by the same amount.
Again, for most of us this isn’t something to worry about, but for those of you with REALLY generous Great Uncle Leonards, be sure their tax free gift to you will eat into their tax free estate amount.
I know what many are thinking on this tip: we should all be so lucky to get such a big gift we have to worry about the tax consequences!
But for many it’s a reality. And someday, when your business is thriving, you could be the one looking to give the gift. And when you do, you can incorporate these tips to make sure you don’t pay taxes on it!
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!
David Lizerbram’s July Legal Tip
How to Register a Podcast Name
One of the most important decisions a new podcaster makes is what to name their podcast. Along with the multiple tasks and to-do’s you’re already considering as you dive into your podcasting journey, there are a lot of boxes to check that you might not already be thinking about.
One of those boxes? Registering your podcast name.
Many podcasters stumble out of the gate because they don’t realize that naming your podcast requires some understanding of trademark law.
Fortunately, a few simple tips will help you create a podcast brand you can use and own – and also avoid (most) legal trouble.
For a deep dive on this topic, be sure to check out the full post we titled Podcast Trademark: How to Register a Podcast Name!
In it, David and I combined forces to break down:
- How trademarks work,
- How to find a name for your podcast that hasn’t already been claimed,
- The trademark registration process, and
- The eternal question: “do I even need to register my podcast name as a trademark?”
If you’re a podcaster, having this information on podcast trademarks in your tool belt is a must!
What Went Down In July
Test, Check, Ditch, Double Down
With lockdown continuing throughout the United States – and maybe even more so here in Puerto Rico – we’ve been looking the projects in our business that have been considered back burner items for a while.
Due to conferences, travel, and other commitments, these projects haven’t made it onto our priority list. But since we’re in lockdown, and a vast majority of our travel and conferences have been canceled, we’ve been focusing on bringing those back burner projects to the forefront.
It’s important to consider what you can create space for during this time, especially given all the frustrations that come with it. What does this new time and space make possible for you?
For us, it has made several SEO and optimization projects possible. And we’ve been doing a lot of testing, checking, ditching, and doubling down as a result!
With each new item that comes up on the list from our contracted SEO and optimization team, we’ve been implementing, testing and then looking at the results.
The team we’re working with, by the way, is Ardor SEO :)
Did that thing move the needle in the way we wanted?
If not, we ditch it.
If yes, we double down.
Over the past month we’ve accomplished a lot thanks to the team we’re working with, Ardor, and the focus we’ve given the tasks they’re creating.
Here are the tasks we’ve been working on in July:
- Website speed
- Broken links on the site
- Cleaning up our redirects
- Optimizing our top podcasting content
- Creating a content plan for the next year
- Adding value to other sites we’ve been featured on
I know it sounds like a lot, but when you have clarity and a plan in place around the projects you want to accomplish, progress is inevitable.
So what does this time and space make possible for you and your business?
Product/Service Income: $113,384
TOTAL Journal sales: 503 Journals for a total of $15,492
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Total: $3,875 (141 Freedom Journals sold)
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- Total: $3,034 (117 Mastery Journals sold)
The Podcast Journal: Idea to Launch in 50 Days!
- Total: $8,583 (245 Podcast Journals sold)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $16,588 (165 recurring)
- New members: $5,637 (21 new members)
- Total: $22,225
Real Revenue: Turn your BIG IDEA into Real Revenue
- Total: $525
Podcast Sponsorship: $74,940
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: $57,108
*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: $26,230
- Audible: $75
- Click Funnels: $12,812
- Coaching referrals: $148 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
- ConvertKit: $60
- Virtual Staff Finder: $100
Courses for Entrepreneurs: $28,265
- Knowledge Broker Blueprint by Tony Robbins: $7,716
- Create Awesome Online Courses by DSG: $582
- Amy Porterfield’s Digital Course Academy: $167
- Crush it w/ Challenges by Pedro Adao: $19,800
Resources for Podcasters: $546
- Pat Flynn’s Fusebox Podcast Player: $99
- Podcasting Press: $91
- Designrr: $0
- Splasheo: $222
- Tim Paige’s Make My Intro: $0
- Libsyn: $31 (Use promo code FIRE for the rest of this month & next free!)
- UDemy Podcasting Course: $103
Other Resources: $2,067
- Amazon Associates: $134
- Other: $1,933
Total Gross Income in July: $170,492
Business Expenses: $26,946
- Advertising: $198
- Affiliate Commissions (Paradise): $1,238
- Accounting: $961
- Cost of goods sold: $2,678
- Consulting: $1,249
- Fulfillment: $553
- Design & Branding: $325
- Dues & Subscriptions: $65
- Education: $270
- Legal & Professional: $315
- Meals & Entertainment: $138
- Merchant / bank fees: $1,191
- Amazon fees: $4,217
- PayPal fees: $273
- Office expenses: $1,810
- Community Refunds: $2,179
- Promotional: $0
- Travel: $5,686
- Virtual Assistant Fees: $3,600
- Website Fees: $0
Recurring, Subscription-based Expenses: $6,106
- Adobe Creative Cloud: $100
- Boomerang: $50 (team package)
- Authorize.net: $70
- Bonjoro: $45
- Cell Phone: $183
- Google Suite: $60
- Internet: $100
- eVoice: $10
- Infusionsoft CRM: $241
- Insurance: $648
- Libsyn: $196
- Linktree: $6
- TaxJar: $19
- Taxes & Licenses: $523
- SEO & Marketing: $3,770
- Zoom: $55
- Xero: $30
Total Expenses in July: $33,052
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 July 2020: $137,440
Biggest Lesson Learned
Refocusing on the 80/20 Rule
With a lot up still up in the air – questions about Covid-19, unknowns about what the rest of 2020 will “look like”, and a lot blank stares and shrugged shoulders when it comes to actual answers – focusing on core projects has been challenging.
Come to think of it, focusing on anything has been challenging!
Luckily we’ve been building that discipline muscle for many years, and as a result we’ve been able to reframe a lot of frustrating situations into situations of opportunity.
My go-to when my willpower is low and anything except focusing on a single task or project sounds like a good idea?
Reminding myself of the 80/20 rule: that 80% of your results come from 20% of your efforts.
I love reminding myself of the 80/20 rule because I know that if we can continue to run our business by this rule, that we will continue to have a massive impact on inspiring millions, and continue to live a life filled with freedom, and that’s my why.
I want maximum impact for others, while living what I preach: time freedom, financial freedom, lifestyle freedom – the freedom to do what I want, when I want, with whom I want.
Any time I’m not feeling so motivated, reminding myself of this does the trick.
Because if I give my full-out effort on our CORE projects that move the needle most for our business – and ditch everything else – then I know it’ll give us 80% of our results.
How is the 80/20 rule playing in your business?
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.