Toph Sheldon CPA for the Self-Employed® - November 2019
NOVEMBER/DECEMBER 2019 VOLUME 3, ISSUE 8
T O P H ’ S TAX RESOLUT ION T I M E S
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Strategies to Even Out the ‘Cash Flow Roller Coaster’ FEAST OR FAMINE
When you’re a self-employed business owner, there are some months when you look at your bank account and worry. Then, there are other months when you breathe a huge sigh of relief. It comes back to the idea of the “cash flow roller coaster”— that period of time when your cash flow varies from month to month. There is a constant shift between feast and famine. The most obvious way to protect yourself when you’re dealing with financial challenges is to cut your expenses. Many people will try to save some money by cooking more meals at home versus dining out. And some may even try to use public transportation to save on gas money. But what are you supposed to do when you literally can’t cut your expenses any more than you already have? The answer is so simple, but it takes a total shift of mindset to accomplish. Rather than focusing on reducing your expenses, you need to focus on increasing your income. I don’t typically like cliches, but this is a classic example of needing to have a glass-half-full rather than a glass-half-empty mentality. This is not easy to do, and it took me a long time to come to this realization. One of the great things about being self-employed is that you control your own destiny and your own ability to earn income. So, how does a self- employed person increase their income without increasing their spending? One way to do this is to get involved in your local community and meet some new people. It doesn’t cost you anything to attend most chamber of commerce meetings or to volunteer at community events. Personally, I never really liked doing this type of networking, but it works! And when your budget is tight, this is a great way to get your name out there to try and stir up some business. Yes, you may end up with some low-hanging fruit, but it’s better than no fruit! Another way to do this is to offer discounts to new customers for paying for a portion of your products or services upfront. Everyone likes getting a good deal, and this creates a win-win because your customer gets a lower price and you get the benefit of some much-needed cash. This probably isn’t a good
long-term strategy, but it’s obviously better to have something than nothing when you’re cash-strapped.
If either finding or selling a new customer/client doesn’t seem to be working, you may want to consider trying to sell some of your nonessential household or personal items on the internet. When I was really struggling financially, I resorted to selling all of my golf clubs on eBay because I needed some money to pay our bills. As a former pro golfer, it was strange (and extremely humbling) not to own any golf clubs for a couple months. However, desperate times sometimes call for desperate measures. During this time, I also sold old clothes, books, etc. — you’d be surprised how big of a market there is online for almost anything. It’s embarrassing to admit, but at one point, I even resorted to buying stuff from my local Goodwill and then turning it around and reselling it on the internet for a small profit. Ultimately, there is obviously no one-size-fits-all solution for beating those famine months, but these are a few strategies you can implement as you grow and develop your business. We all know that starting and growing a business is hard. It’s always good to have strategies in place you can try to help even out your monthly cash flow.
–Toph Sheldon
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DON’T LIVE IN FEAR, TOPH IS HERE!
CELEBRATING
A Burden Is Lifted
2 Client Success Stories
The battle with the IRS continues! This month, I have two more success stories to share. There were more tough situations and negotiations that had happy outcomes. Success Story 1: The first client cried tears of joy when we resolved her case. This client is a self-employed seamstress who had been battling the IRS for a long time. In fact, her troubles really began in 2012 when she was working with an accountant to get her business off the ground. Unfortunately, the accountant left her with bad advice, and she ended up with a tax bill of $27,000. She knew this couldn’t be right, certainly not for a new business owner. Well, she was right. After two years of negotiations between her, myself, and the IRS, they agreed on a settlement. Their number? $100. You read that right. They knocked her bill down from $27,000 to $100. But it did come with a stipulation: She must file and pay all her taxes on time for the next 5 years. It was a stipulation she was more than happy to accept. When I told her the news, she broke down on the phone as her burden had been lifted. Success Story 2: This month’s second client is a residential building contractor. When he hired me, he owed $30,000, and the IRS had filed a tax lien against him. We were initially able to negotiate a payment plan with the IRS. He would pay $500 per month (which was what he could afford) to pay off what he owed.
Supporting the People You Believe In November is usually all about Thanksgiving, but it isn’t the only holiday that encourages generosity. GivingTuesday is a phenomenal celebration in which millions of people from across the globe are inspired to spend 24 hours giving back to the communities they love. Origin andGoal GivingTuesday is celebrated every year on the Tuesday followingThanksgiving, and this year, the holiday lands on Dec. 3! It was established in 2012 by the United Nations Foundation and NewYork’s 92nd Street Y as a response to consumer-driven holidays like Black Friday and Cyber Monday. The purpose of the holiday was to spread the spirit of giving, not only for the people in our nation but individuals across the world. The goal is“to create a massive wave of generosity that lasts well beyond that day and touches every person on the planet.” Technology at Its Best Through the use of social media and technology, the organization hopes to encourage and spread generosity on a global scale using the hashtag #GivingTuesday. The website states that“... technology and social media could be used tomake generosity go viral; that people fundamentally want to give and talk about giving.”Throughmassive social media platforms like Facebook andTwitter, the individuals and companies participating in GivingTuesday can spread their missions and messages all over the world, encouraging others to do the same. HowYou Can Celebrate Now is the perfect opportunity to support your community and the causes you believe in. The best part of this holiday is that“giving”doesn’t just refer to donatingmoney. People can give back by volunteering their time to help a nonprofit business, donating goods and food, or just buying a stranger some lunch. Even the smallest actions can have the biggest impact. If you’re interested in participating in GivingTuesday, get together with your friends, family, sports teammembers, or neighbors to brainstorm on how you can give back. To learnmore about how you can participate, visit GivingTuesday.org.
However, after we came to terms with the IRS, I continued to investigate his case and noticed that something
was off. I realized his accountant had set up his business so inefficiently that he had actually been overpaying for years.
I suggested that he amend these mistakes and get his business
restructured so that it was correct. Once everything was in order, we learned that not only did he not owe the $30,000 but he was also owed by both the IRS and the state of Ohio! He got back a huge refund — $40,000 total for a $70,000 net savings! — and had the tax lien lifted. Going forward, his taxes will be much lower too. That’s a major win-win!
–Toph Sheldon (All amounts listed are rounded to the nearest thousand.)
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The Sheldons Give Thanks
This year, our family will be traveling to upstate New York for Thanksgiving. We’ll head back to my hometown, Jamestown, and the place where my mom, dad, grandma, and many friends still call home. My sister will also travel up from Florida with her husband and kids, so it’s going to be a full house. Spending Thanksgiving as a family in Jamestown is really exciting, and I know we are all looking forward to everyone being together. We haven’t gotten together with my sister and her family in over two years now, so it will be great to see everyone in one place. Our kids are excited to meet their cousins, and we’re all excited to meet the newest member of the family. My sister just welcomed a new baby girl into the world in September!
business trip as a birthday celebration. My mom is coming down from New York to watch the kids while Toph and I take a long weekend to relax.
Having the time with just Toph to decompress and just be together is certainly one of the many things I’m thankful for. It’s a good way to reset. We try to plan one trip every year as we celebrate our birthdays and just take a break from the day-to-day bustle. Speaking of being thankful, it’s been a big year. Our business has just moved into a newer and larger office space, and we’re expecting our fourth child! It’s been quite a journey, and I’m thankful for all of it.
I’m also grateful our older kids are getting to the age where they can really understand thankfulness and giving. At some point around the holidays, we are going to do something as a family to give back to the community. Whether it’s buying a family a turkey for Thanksgiving or adopting a family for Christmas, we’re excited to offer some help for those less fortunate.
Speaking of birthdays, mine is at the end of October and Toph’s is at the beginning of November. The last couple years we have been able to get away without the kids for a few days to celebrate and this year is no different, as we’re excited to be going to Las Vegas! We’ve got a conference out there so we’re going to double our
–Ashley Sheldon
Happy Thanksgiving!
The Best Leftover Turkey Sandwich
TAKE A BREAK
Thanksgiving may be held on Thursday, but the food often lasts at least through the weekend. To make the best use of the excess, grill up some killer turkey sandwiches.
Ingredients
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2 slices sourdough bread 2 tbsp Dijon mustard
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2 tbsp leftover gravy
1 tbsp butter, room temperature
2 slices Swiss cheese
1/3 cup shredded leftover turkey 3 tbsp leftover cranberry sauce 1/3 cup leftover dressing or stuffing
Note: Don’t worry if you don’t have all the leftovers required.
Directions
1.
Coat inside of each bread slice with mustard and a slice of cheese. Place turkey and cranberry sauce on one slice and dressing and gravy on the other. Combine sandwich and spread butter on both sides.
3.
In a panini maker or large skillet, grill until crispy and golden brown.
4.
Slice and serve.
Solution on Page 4
2.
Inspired by FoodNetwork.com
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TOPH SHELDON CPA FOR THE SELF-EMPLOYED ® 9200 MONTGOMERY RD., STE. 7B CINCINNATI, OH 45242 513-342-4000 TOPHCPA.COM
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INSIDE 1
Strategies to Lessen the Financial Famine
2
The Gift of Giving
What Happens When You Negotiate With the IRS
3
The Sheldons Give Thanks
The Best Leftover Turkey Sandwich
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Rapper Lil Wayne Racks Up a Massive Tax Bill
Toph’s Tax Nightmares
Lil Wayne Owes Big Money Up until this year, Dwayne Michael Carter Jr., better known as the rapper Lil Wayne, owed the IRS a whopping $14 million. In March 2019, it was revealed he had settled his tax debt with the IRS. Lil Wayne is worth an estimated $120 million, but it turned out the rapper had been skipping out on paying taxes. The IRS stated he owed over $7 million for the 2011 tax year and another $7 million for 2012. So, in 2014, the IRS placed a tax lien on the recording artist. But, thanks to a very good friend, that’s all in the past. In March, the rapper came out and said the tax debt was taken care of. But, despite his apparent net worth and income as a successful rapper, he wasn’t the one who paid down the debt. It seemed Lil Wayne had relied on another recording artist to help him with the debt: Jay-Z. Apparently, Jay-Z (Shawn Corey Carter) came to Lil Wayne’s aid. According to Lil Wayne, speaking to fans at a concert: “There are people like Jay-Z. He helped me when I was really, really, really down. Really, really, really down. Jay don’t want me to tell nobody. That man helped me with my taxes. He’s a real friend, y’all.”
the two rappers weren’t always friends. In fact, Lil Wayne and Jay-Z had been locked in a four-year feud, which started in 2009.
In what you might call a twist of irony, it was a feud that made these two rappers quite a bit of money. They both released several diss tracks targeting the other, and fans ate it up. However, it was clear the feud had come to an end when Lil Wayne partnered with Jay-Z in 2015 to release an album on the Tidal music streaming service, a service backed heavily by Jay-Z.
Just how much Jay-Z helped isn’t known, but Lil Wayne’s tax debt has been completely wiped out. Rap fans may find this story particularly interesting because
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