July 2021 Income At-A-Glance
Gross Income for July: $280,608
Total Expenses for July: $18,935
Total Net Profit for July: $261,673
Difference b/t July & June: +$86,370
% of net profit to overall gross revenue: 93%
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.
Let’s IGNITE!
**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: IRS and Tax Audits
There are five little letters that are scary enough to send shivers down even the most diligent tax-payers spine. A word so frightening it can cause a panic just seeing the letter in the mail… from the IRS. Audit.
It almost makes you wince just saying it out loud!
But the truth is, IRS audits are really nothing to fear, assuming you aren’t a tax cheat. For many reasons, having an audit isn’t likely to seriously impact your life.
First of all, your chances of being audited are incredibly low.
In 2018 (the latest year statistics are available), the chances of being audited if your adjusted gross income is $75,000 to $100,000 is just .45 percent.
Those who hit adjusted gross income in the $100k to $200k are at just a .44 percent risk of being audited.
Not until you are making over $500k a year does your audit chances go above 1 percent, and even then just barely. Even those at the highest income threshold making $10 million and above are only audited at a 6.6 percent clip.
A combination of reduced funding, dramatically reduced staffing, and a higher workload within the IRS has led to the shockingly low number of audits. But not only are your chances low of ever being audited, even if you are one of the unlucky few to get one, it’s probably not as bad as you think.
There are three different types of audits.
And while many of us tend to picture agents combing through our every financial document, 75 percent of IRS audits are what they call correspondence audits. This simply means the IRS mails you a letter asking you to verify a small portion of your tax return. For example, they may ask you to send proof of the 4,000 miles you wrote off as business mileage. You simply mail back your mileage log, and assuming it all lines up, you are good to go. Quick, easy and painless.
The other 25 percent of audits consist of “office audits”, where the IRS asks you to come to their office and go over several parts of your return.
And the scariest version, “field audits”, where the IRS comes to your office and combs through the documents in question. Those types of audits are both very rare, and in the case of field audits, mostly the result of very serious tax discrepancies.
Finally, the biggest reason not to fear an audit is that you can fully protect yourself, even if you are one of the chosen few, by simply doing your return right, keeping proper records, and not cheating on your taxes.
The number one way most people are selected for a correspondence audit is by not properly claiming all their income. Maybe you forgot to include a 1099 (even though the income was accounted for on your Schedule C).
By simply sending back your records and a brief explanation, you will likely be able to end the audit with no harm done or money owed in one brief mailing.
When I played high school basketball our coaches used to constantly use the phrase “respect everyone, fear no one”. This is the exact attitude you should have with the IRS. They should be respected. They can make your life tough if you don’t do what you are supposed to do. But if you are on the up and up, there’s absolutely no reason to fear them!
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
Website Terms of Use and Privacy Policy: When Is It Time to Update?
If you have a website or an app, you (hopefully) know that you need to have Terms of Use and a Privacy Policy.
The Terms of Use (also referred to as TOU, Terms and Conditions, or Terms of Service) is a contract that users enter into when they use your website/app or any of the features or services found therein. The TOU can limit your liability, set out who owns what, and make it clear what happens if there’s a breach, among other things.
A Privacy Policy details what type of information you collect from your users and how you are going to use it. As with the TOU, it can limit your liability and define the venue where any dispute will be heard. It’s also required in many circumstances by various laws.
I’ve worked with many website and app owners on TOUs and Privacy Policies. It’s important to have them in place, but once they’ve been drafted and uploaded, they can’t just sit there forever without requiring any further attention.
The circumstances of your business or the underlying laws can change from time to time, rendering your TOU and Privacy Policy out of date. For example, the California Consumer Privacy Act (CCPA) applies to businesses with users in California (even if the business itself is based elsewhere). CCPA went into effect in 2019, and many existing Privacy Policies still haven’t been updated to reflect the requirements that may apply to those businesses.
So when is it time to review your TOU and Privacy Policy to ensure that they’re up-to-date and your business is best protected against legal claims?
The general rule of thumb is that these terms should be reviewed and updated on an annual basis. It’s also a good idea to review the policies when one of the following two things occurs:
- You make a substantial change in your business. For example, if you introduce a new type of service, the terms that you want to apply to that service may not be reflected in your existing TOU.
- The laws change. Privacy laws are changing all of the time. If you become aware of a significant update to privacy law, or if you attorney advises you about such a change, it’s time to go back and review your Privacy Policy to ensure that it’s still up-to-date.
In summary, the best practice is to review (or have your attorney review) your website or app’s Terms of Use and Privacy Policy on at least an annual basis. Set a reminder to do so along with other annual business compliance so this important piece of website hygiene doesn’t keep getting pushed to the bottom of the to-do list.
If you need your website or app’s Terms of Use and Privacy Policy reviewed, feel free to contact me!
What Went Down In July
A Trip to Maine
Half of our July was spent in the beautiful state of Maine visiting family and friends. While we didn’t have the weather we were hoping for (it actually hailed one day we were there!), we had a fantastic time hiking, swimming, biking, and overall – enjoying great company.
From Portland to Kennebunk, down to York, through Portsmouth, and finally, north to Bar Harbour, we enjoyed every piece of what Maine has to offer.
Prepping for Podcast Movement 2021 in Nashville
As is the case with most of our trips, we plan ahead so that we don’t have too much work on our plates. This was certainly true for our time in Maine; however, with Podcast Movement right around the corner, I knew I had a lot of reps to put in in preparation for my opening keynote!
During my morning walks and runs, and in the evening when I had a chance to sit out on the dock or take the paddle board out, I listened to my talk, read my talk, walked through my slides, rehearsed… and everything in between!
We had about a week at home back in Puerto Rico before heading the Nashville for Podcast Movement, which we’ll be sharing a full recap of in our August income report!
Spoiler alert: it was awesome :)
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July 2021 Income Breakdown*
Product/Service Income: $241,401
TOTAL Journal sales: Total Journals Sold 198 – $6,848
The Freedom Journal: Accomplish your #1 goal in 100 days!
- Total: $2,602 (73 Freedom Journals sold + 2 Digital Packs)
The Mastery Journal: Master Productivity, Discipline and Focus in 100 days!
- Total: $1,347 (36 Mastery Journals sold + 1 Digital Pack)
The Podcast Journal: Idea to Launch in 50 Days!
- Total: $2,899 (86 Podcast Journals sold)
Podcasters’ Paradise: The #1 Podcasting community in the world!
- Recurring: $12,494 (111 recurring)
- New members: $5,249 (17 new members)
- Total: $17,743
Real Revenue: Turn your BIG IDEA into Real Revenue
- Total: $150
Podcast Sponsorships: $216,605
Podcast Launch: Audiobook: $40 | eBook: $15
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: $39,207
*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: $11,512
- Audible: $50
- Bluehost: $0
- Click Funnels: $9,562
- Coaching referrals: $1,900 (email me for an introduction to a mentor for overall online business or a Podcast focused mentor!)
Courses for Entrepreneurs: $21,863
- Crush it With Challenges by Pedro Ado: $1,588
- Tony Robbins & Dean Graziosi: $20,275
Resources for Podcasters: $608
- Podcasting Press: $117
- Splasheo: $50
- Libsyn: $324 (Use promo code FIRE for the rest of this month & next free!)
- UDemy Podcasting Course: $117
Other Resources: $5,224
- Amazon Associates: $194
- Other: $5,030
Total Gross Income in July: $280,608
Business Expenses: $16,905
- Advertising: $530
- Affiliate Commissions (Paradise): $1,502
- Accounting: $1,750
- Cost of goods sold (Journals): $1,373
- Consulting: $1,500
- Fulfillment: $0
- Design & Branding: $0
- Dues & Subscriptions: $200
- Education: $314
- Legal & Professional: $819
- Meals & Entertainment: $291
- Merchant / bank fees: $532
- Amazon fees: $2,796
- PayPal fees: $372
- Shopify: $15
- Office expenses: $280
- Community Refunds: $988
- Promotional: $40
- Sellozo: $149
- Travel: $370
- Virtual Assistant Fees: $2,975
- Website Fees: $109
Recurring, Subscription-based Expenses: $2,030
- Adobe Creative Cloud: $100
- Boomerang: $50 (team package)
- Authorize.net: $70
- Bonjoro: $45
- Cell Phone: $187
- Google Suite: $34
- Internet: $40
- eVoice: $10
- Infusionsoft CRM: $241
- Insurance: $89
- Libsyn: $153
- Linktree: $6
- TaxJar: $19
- Sellozo: $149
- Streamyard: $49
- Taxes & Licenses: $523
- Zoom: $205
- Xero: $60
Total Expenses in July: $18,935
Payroll to John & Kate: $15,900
In our May 2014 Income Report and our June 2016 Income Report, Josh focuses on how to pay yourself as an entrepreneur. Check them out!
Wondering what we do with all of our net revenue? We share all in our April 2017 Income Report :)
Total Net Profit for July 2021: $216,673
Biggest Lesson Learned
Put in the Reps
I know you’ve heard John say it at least a hundred times, and it’s SO true. If you want to become better at something, you have to put in the reps.
It’s a great answer to give yourself to most questions that come up around business…
- How do I become a better speaker?
- How do I improve my interview skills?
- How do I create better relationships?
- How do I get in touch with the experts in my industry or niche?
- How do I get people to notice my work?
You put in the reps.
This was very evident to me in July, since as I mentioned before I spent a good portion of my time in Maine “putting in the reps” for my talk at Podcast Movement.
This being my first keynote ever, I knew I wanted to be fully prepared and feel comfortable with the content I was going to share. While it wasn’t my first time on stage, it was by far the biggest stage I’ve ever been on – plus, this was a brand new presentation I hadn’t shared before.
Putting in the reps helped me feel comfortable and confident about my time on stage, and I’m so glad I’ve heard this answer to many of my questions hundreds of times: put in the reps!
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.
