November 2024 Income Report

0:01Boom! Shake the room, Fire Nation. JLD here and welcome to Entrepreneurs on Fire. Brought to you by the HubSpot. Podcast Network, the audio destination for business professionals with great shows like This Old Marketing. Today, we're talking with our accountant about why tax planning is critical. We're also talking with our lawyer about how to leave an LLC. And I'm also announcing the launch of a new daily show that I've created over on YouTube called MicroStrategy Today. Very excited about that. As soon as we get back from thanking our sponsors. The next wave, your chief AI officer hosted by Matt Wolf and Nathan Lance, is brought to you by the HubSpot Podcast Network, the audio destination for business professionals.

0:41AI technology is transforming the way we do business and the media landscape is fragmented. The Next Wave strives to be the leading podcast on AI technology and how you can apply it to growing your business. Listen to The Next Wave wherever you get your podcasts. Looking for an easier, safer way to manage passwords than a million Post-it notes? Welcome to LastPass, the most accessible and easy-to-use password manager on the planet. Visit lastpass.com slash fire for a free trial and get started today. Every login lives in LastPass. All right, Fire Nation, let's kick off today's income report in style with our gross income from November at$96 ,482.

1:22Our total expenses were$12 ,399 for a net profit of$84 ,083. A percentage of net profit to overall gross revenue was 87%. And Fire Nation, we're going to move it over to Ron and Mr. CPA on Fire himself, who's going to be talking about navigating uncertainty, why tax planning is critical. So Ron, take it away. Hello, John, and hello, Fire Nation. This is Ron Parisi with CPA on Fire for your November 2024 tax and accounting tip. Hey, Fire Nation, hope everybody's doing well. as we polish off another year for 2024. Today's topic is going to be on tax planning and strategy. And I think we're in a very interesting time regarding the tax situation here in the United States.

2:15A couple of things that are very important to you, Fire Nation, as business owners, right? We have, if you remember the 2017 tax changes, a lot of those are expiring in 2025. And the biggest thing I think is rates are going up. So in 17, they reduced the rates and those are set to jump back up after 2025. So there's definitely some, I think, long-term tax strategy planning to happen. But on the reverse side, there's some uncertainty, right? With the new regime coming in in January, you know, what exactly is Trump and cabinet going to do regarding taxes? So I think, you know, before I get into the actual, you know, what steps we can take either before the year or early next year on reducing your tax strategies, I think it's very important just to take a pause and just realize like, you know, what can you do strategically, right?

3:20Strategically is like, you know, have your financials always current, up to date and be ready for changes. You know, be on the front of your skis as far as, you know, being ready for these changes that are going to be coming down the pipe. You know, one thing, the biggest thing right now is what's called QBI, right? qualified business income and the 20 % federal tax haircut you can potentially get. So one is working with your tax professional before 1231 this year and making sure that you're maximizing that credit or deduction rather. Two is we can go through looking at opportunities. If you're an S-Corp, the accountable plan, making sure that you're reimbursing everything for yourself.

4:13If you've instituted any kind of Augusta plan, rentals, making sure that those payments are all made. And then what we talk about is just, hey, looking down your vendor list, is there anybody that we can prepay, reduce our income and save on taxes that way? but really you know I think it's important and then lastly I guess is the retirement planning right making sure that if you are going to institute any kind of a retirement plan new retirement plan this year that all those changes have to happen for 1231 hopefully that's already in place or hopefully you already have a retirement plan in place but really just looking looking out and really trying to figure out, you know, the landscape, you know, what's going to happen in 2025, what's going to happen in 26 and beyond.

5:06And just really, you know, understanding the levers that, you know, they're going to pull, meaning, you know, the IRS and the Treasury, as far as, you know, changing the landscape for you, the business owner, whether you're, you know, Schedule C file or LLC, S-Corp, C-Corp. And, you know, I think it's going to be really important to kind of see, you know, what direction the administration is going to be going in, really looking at, you know, starting with entity configuration, and then just how you go about, you know, thinking about your tax plan, and then particularly pivoting and moving through those changes.

5:50Some of the other big changes I just want to mention, right, besides the tax rates, right, our standard deduction is going to go down, right, and then there's a host of changes regarding business, meals, all of those, you know, medical expenses, your real estate tax deductions on Schedule A, so a lot of different changes coming down the pipe, but, you know, we don't know. Are they going to be extended? Are they going to be changed? Obviously, during the campaigning, there was a lot of things said. So it's kind of a wait and see. But in the meantime, make sure you work with your tax professional, maximize your QBI, make sure your accountable plan, Augusta, those strategies are taken care of and implemented before the end of the year.

6:40just do a quick review of your retirement, prepay any vendors that possibly could be prepaid. And, you know, there's more, but, you know, they get a little more complex that, you know, you should be working with your tax advisor at this point, not in April. At this point, you should be having conversations with them about reducing, you know, how to go about reducing your tax liability for 2024 and beyond. Again, Fire Nation, always a pleasure being with you. This is Ron Parisi with CPA on Fire. Until next month, we should have the best. Everybody have a happy holiday and a wonderful new year. Take care now.

7:19Ron, thank you so much for dropping those value bombs. And as always, Fire Nation, check out cpaonfire.com for all of your accounting needs. Let's talk legal now. Let's talk with David Lizerbram, and we're going to talk about how to leave an LLC. So David, take it away. What's up, Fire Nation? David Lizabram here, and I'm excited to be back with another legal tip for you. I've been practicing law for 22 years. I have loads of free content at my website, which is LizabramLaw.com, L-I-Z-E-R-B-R-A-M Law.com. Just Google it and you'll get close. You'll find me. This month's legal tip is about how to leave an LLC.

7:58leaving an LLC as a member can be a complex process it's influenced by the provisions in your LLC operating agreement and relevant state laws so in this guide in this discussion I'm going to break down some key steps to help you navigate the process efficiently telling you what to watch out for and things like that so you know the first step pretty clear is to review the LLC operating agreement that's the document that kind of governs the LLC like the constitution for your LLC. It'll typically outline the procedures for leaving. You might need to provide written notice or get consent. Usually, you know, a well-drafted operating agreement will make it pretty clear.

8:35Are there valuation methods, buyout provisions, etc.? How do you figure out the value of your interest if you're leaving, timelines, things like that. If you don't have an operating agreement, your LLC does not have an operating agreement. First of all, shame, you should. But, you know, know, sometimes things slip through the cracks, and in that case, state default rules will apply. That may be a little unpredictable, but, you know, you got to be careful about these things. And again, this is something where working with legal counsel can be helpful. Now, state laws matter one way or the other.

9:09Most states in the U.S. follow something called the Revised Uniform Limited Liability Company Act. that provides kind of a consistent framework for LLC operations, and it includes procedures for member withdrawal. But every state can be a little different. New York has its own procedures that can be complex if the operating agreement lacks specific guidelines, just as an example, you know, just to pick one state. Sometimes you have to go to court to resolve disputes or issues around valuations and things, and, you know, you try to avoid that. And that's why, again, you want to make sure that you have an attorney who knows what they're doing write your operating agreement for your LLC.

9:49If your LLC is based in a state that follows the Uniform Act with minimal modifications, the process of leaving is typically pretty straightforward. You'll provide formal notice and follow valuation procedures, again, to figure out the value of your interest when you leave. you know sometimes additional planning is required now let's kind of get into the valuation piece because if you're leaving an LLC and the company has value then you know you you don't want to just leave that on the table you want to make sure that you are receiving a fair return for your investment for your effort for whatever it is that you did to help grow that company so this you know we'll call this determining the value of your membership interest if the operating agreement includes a buyout formula or a valuation method, okay, you've got to follow those guidelines.

10:39That could include using a predetermined earnings multiplier, an independent appraisal, meaning the company hires somebody to, you know, figure out what the value is, or a book value calculation, depending on the, you know, assets and so forth. If there is no specific method, the state law will often require a quote-unquote fair market value approach. That, again, means you're probably going to have to bring in an independent appraiser to review the books and come up with a valuation for the business. And this can lead to disagreements, to be honest with you, if other members, the other people in the LLC believe the valuation is too high or too low or whatever it may be.

11:15This also can have tax implications. It's advisable to an involved accountant early on. You need to understand how your capital account will be treated and also whether any gains in the business, built-in gains may create tax liabilities. Likewise, if the LLC has outstanding debts or financial obligations, that'll affect your payout. It's not just about determining a fair price. I just want to make that clear. It's also about ensuring that all financial obligations are settled and that you leave without future liabilities tied to the business. So it's not just about coming up with a number. There's more to it.

11:48You also need to look into indemnification, Meaning, are you going to have any liability when you leave? Or is the company effectively going to indemnify you and cover your legal liability if there's any lawsuits relating to the company? Again, this is a situation where you're going to want strategic legal counsel. In California, where I'm based, indemnification may be provided based on state law as opposed to, let's say, New York again. there are more exceptions, meaning there's more circumstances where the leaving member, which is you in this case, may not be indemnified or protected. So you've got to make sure all these things are addressed.

12:30Just kind of from a tax perspective, your share of any income or losses from the LLC will need to be settled when you leave. This may include filing a final K-1 form. This is in the U.S., of course, to report your share of the LLC's income, deductions, and credits to the points of your exit. If there are significant profits, you could face a tax bill that needs to be addressed properly. So you want to make sure you get a clean exit to avoid surprises for you and for the other members of the company at tax time and kind of maintains goodwill. So again, it's not just simply a matter of walking away.

13:02There's going to be some pieces that need to be figured out. And if your company has followed the recommended steps and you have a good solid operating agreement in place, that's going to make the process typically a little bit more smooth. If not, state law kicks in and that may lead to complications or delays. Again, we're just trying to make sure you have a successful exit and avoid any surprises, legal liability, tax liability, all these kind of things. That's where we're working with an attorney and a CPA who knows what they're doing are going to really make all the difference here. If you have questions about leaving a business or getting into a business or operating your business from the beginning to the middle to the end, feel free to contact me.

13:38Again, it's david at liserbramlaw.com. You can go to my website, click the contact button, et cetera. I'm always happy to talk with members of Fire Nation. And thanks a lot. And I'll talk to you next time. David, thank you as always for those value bombs and Fire Nation. Lizabramlaw.com is where you can go to contact David. In fact, if you just hit slash contact onto that URL, it'll go right to his contact form. You can ask him any questions you have. He loves hearing from Fire Nation. Now we're moving on. I want to talk about what went down in November. The first thing was our interview of the month.

14:10It was low ticket to high ticket sales funnels with my man, Tom Morquez. A few value bombs that came from that. Number one is that success is a trap and a snare for many people. It's what you become at the end when the dust settles, but it is not a measuring stick. It should not be used to determine your value. And number two, pricing depends on the strategy or business model. Understand first your business model and what you need to do. And for number three, you're going to have to listen to the actual interview at Cellfire Nation. Just go to eofire.com and type Tom Morquez, that's M-O-R-K-E-S, and listen to that great interview.

14:42Now I want to talk about my exciting project that I just launched about 30 days ago. I have been a big fan and a big proponent of Bitcoin for about four years now. I really started to understand it four years ago, three years ago, two years ago, as I just read more, consumed more, learned more. And then within Bitcoin, there's a company called MicroStrategy. And the founder and the leader of this company, Michael Saylor, he's just become also a big proponent of Bitcoin over the past four years. And specifically in 2020, he decided to go big with MicroStrategy into Bitcoin. And he did a lot of very interesting things and really just became a Bitcoin company in a lot of ways.

15:24I won't go into too many details here because it'll probably be boring for a lot of people. but essentially Michael Saylor's goal is to turn MicroStrategy into the Bitcoin treasury company of the world. Now, what does that mean? It's a big question and if it doesn't interest you, do not check out my show but if it is interesting to you to learn more about Bitcoin, to learn more about a company that is going all in on Bitcoin and what that exactly means, just go over to YouTube, check out MicroStrategy today. That is my show. You can search for my name, MicroStrategy today. Micro, that's M-I-C-R-O, Strategy Today.

16:00That's the name of the show. And I'm doing it seven days a week, my friends. And this is a show that I don't bash and I don't actually create in advance of because it's daily news updates and insights of Micro Strategy. So it's a commitment. It's the first thing that I do every morning. I'm very passionate about it. I'm having a lot of fun. And for those people that are interested, I would love for you to check it out, give me some feedback. There's a lot of comments on every single one of my videos because it's a very interesting topic. Some people love it, some people don't love it at all. And then there's, of course, a lot of people in the middle who are trying to learn more.

16:32So that's my big passion. It really follows what I've been saying for a long time, which is become the number one solution to a real problem. And that's what this show is. Not only am I the number one solution to a real problem, I'm the only solution to a real problem. MicroStrategy today is the only show that comes out seven days a week, I haven't missed a day, that is delivering the news, the intel, the insights of micro strategy and what it's doing, what it's planning on doing, the past, the present, the future, all these exciting things. So it's a real problem because there's a lot of people out there that want this content, but they don't want to cipher through all of the fake media and all of the this and all of the that.

17:11They just want a trusted source, which I'm quickly becoming to a lot of people. And they want to be able to press play and know they're getting the best, the top, the most meaningful content around micro strategy. So that is exactly why I created this show. And I hope those of you that are interested, go check it out because it's definitely a passion project that I don't have any desire of stopping anytime soon. And man, what a fun time it is. Before we move on to the next topic, I want to bring Kate Erickson on to have her give her thoughts on this new little passion project of mine. Kate, take it away.

17:44Hey, what's up, Fire Nation? Excited to be on the mic with you. Happy holidays. Happy December when you're listening to this audio. But again, we're still talking about November 2024 and our income breakdown and what we were up to this past month. And John has just shared his new show on YouTube, MicroStrategy Today. And I am so excited for this new venture. I know that, John, you've been patiently waiting for the next, what shall we say, passion project to come about. And I think that this is fantastic because I can tell that you are so excited about it, so passionate about it. And Fire Nation, I have to be honest, I did not know who MicroStrategy or Michael Saylor were before John shared this new project with me.

18:38And he's given me the full breakdown and I asked so many questions. But I am very excited for all the new things that are coming up with this company, all the new potential and things are moving so, so fast in the cryptocurrency world. And it sounds like MicroStrategy and Michael Saylor are up to some big things. So as John said, this is clearly something that people want and need, this content, and him being able to gather up so much information that's coming out and give it to people in a concise, easy to consume, on-demand way, I think is fantastic. There are so many daily shows that, well, there are not so many daily shows.

19:25I was gonna say there's actually only one other daily show that I listen to in the news category and that is the Newsworthy. And I think it's such an awesome way to tune in and find out what's going on in the world. Just a very quick hit of unbiased news on what's going on in the world. And I love that I don't have to go to a hundred different sources and try to sift through everything that's going on in the world. I can just tune into the newsworthy and Erica Mandy gives me a 10 minute breakdown of what's going on in the world. And this is John's way of doing that for people in the micro strategy, Bitcoin world.

20:05and so I think that's absolutely awesome. John, I'm super excited for you. I cannot wait to see where this goes and it's really cool that we've been in the podcasting space and in the content creation space for such a long time and to fully dive into YouTube and to start kind of, I mean, we have entrepreneurs on fire on YouTube but that has always kind of been more of an automated thing that we've done. So you diving feet first, head first, all the things first into the new YouTube world, not the new YouTube world, but the YouTube world is very exciting. So congratulations on the launch. Congratulations on the momentum and everything that you're gaining already.

20:48I'm very excited to see where this takes you in the new year. All right. Thanks for rocking the mic, Kate. Thank you for the kind words. And Fire Nation, we have a lot to talk about when we get back from thanking our sponsors. Picture this. You're at a party and someone asks you what you do as a marketer. How do you even begin to describe it? Not only do you brainstorm new campaigns, create compelling copy, dream up landing pages that will actually convert and generate leads, you also have to gather all the data to make sure it's even working. And tomorrow you'll do it all again. Marketers are spread way too thin, but HubSpot has a better way.

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24:24Our product service income was$93 ,382. We did 36 journal sales. We also had$90 ,670 come in from sponsorships. We did$3 ,100 in affiliate income with ClickFunnels being our big one at$2 ,178. Our total expenses were$12 ,399 for a total net profit of$84 ,083. Now, Kate, let's talk about the biggest lesson learned. And I think it's going to be something about a year in review. All right. As we are so fast approaching the end of the year, I thought it would be appropriate to share a biggest lesson learned that I always share this time of the year. And that is how critical a year in review is. So I'm always reminded this time of year how important it is to take a time out to look back at what you've been up to this year.

25:15And not just what you've been up to, but how important that is in terms of lessons learned, what you can double down on, what you can avoid moving forward. And I always find it's a really helpful tool for planning for the new year. So whether you look at the new year as a good time for goal setting, or maybe there are some milestones that you would like to hit. maybe you just want to plan out the big projects and things that you would like to accomplish this year, whatever way you word it or phrase it, a year in review is very helpful for this. And the great news is it can be done in five super simple steps.

25:52So again, doing a review year not only allows you to see how far you've come so you can celebrate your wins, which is super important. We spend a lot of our time thinking like, oh man, I didn't hit that goal or oh, that didn't go the way that I wanted, but not often do we stop to celebrate how far we've come. So doing a review can help you take that time out to say, wow, I really have accomplished a lot. I really have come a long ways. That's super important, of course. It also allows you to acknowledge the lessons that you've learned and how you could leverage those lessons moving forward. So in this way, a year in review can again be very helpful when it comes to creating goals and milestones that you'd like to hit in the coming months.

26:32So whether you are in tune with us right now and doing this for the new year, or maybe it's mid-year, it doesn't matter what time of year, there are five simple steps to doing a review. And you could do this for the quarter, for a half year, or for the whole year. Again, it doesn't matter what time of year it is, just dive on in and you will be glad that you did. So the five simple steps are to, number one, take note of the bigger projects that you've worked on in whatever timeframe you're looking at. That might be launches, it might be campaigns, it might be new marketing strategies that you've implemented, it might be hiring new team members, it could be launching a podcast.