A Creative's Tax Turnaround: Keeping More Income w/ 3 Essential Strategies

It was Benjamin Franklin that said there are only two things in life that are certain. One of them is super depressing, and I don't even want to mention it, but the other one is taxes, which is also just as depressing if you're not taking care of it. And as I'm recording this in the United States, we are facing right around the time that we are normally going into the post office that we're filing and we are sending emails to take care of the taxes for last year. That was a huge issue for me for the last few years as a creative because I was not taking care of my finances as a creative. The tax bill was getting higher and higher, and I really wasn't taking advantage of all the things that I should have been taking advantage of to keep that under control. And maybe you're like me, maybe you're someone who simply does not want to deal with these issues, and you don't have a system and you don't have a plan, and you just kind of like close your eyes and send in as many you know receipts as you can. You send a shoebox to your accountant and you pray for the best. And I'm telling you, there's a way to defeat that attitude, to defeat that overwhelm, to get out of that fear. You can take these three strategies that I learned on how I saved thousands of dollars and brought my tax bill down to almost not, no, I won't say almost, brought it down to zero and ethically did that by utilizing the strategies that I learned and that I'm gonna share with you today. It's mindset over money. Most important thing about this episode is about the mindset you're gonna take toward it and how you're gonna apply these concepts to your creative life. We're gonna jump right into this creative checkup that I shared with the creative community after the intro. So take some notes, but more importantly, get ready to take some action so that next year, around this time, if you're listening in April, you won't feel any kind of fear at all. Okay? Here we go with the intro, and then get ready for our creative checkup. You're gonna enjoy this.

SPEAKER_01 2:08

Artists, musicians, and creatives of all kinds, looking for help balancing your passion to create with your everyday life? Not sure if your faith can coexist with your profession? Welcome to a place where real artists discuss real life. You're listening to the God and Gig Show. Visit godandgigs.com for show notes, links, and more information.

SPEAKER_00 2:37

Normally around this time in the US, we're dealing with what we call tax day, and it's April 15th, usually, and it's when everybody freaks out if you haven't been taking care of this in advance, and you've got to go take care of your taxes, file your taxes, uh, go to the IRS, uh, Uncle Sam, whatever you want to call, and file your reports for the previous year. So people are filing for 2020 right now. So you might say, okay, well, Alan, why are you talking about this? This is a creative space, this is a place where we're supposed to get inspired and create and write music and write art, write poems, and draw pictures and do photography. And why are you talking about taxes on a day where I was hoping to get some inspiration? And the reason is is because I wanted to be very upfront with you. And even why I decided to just you know throw on the video is because I was not really realizing the impact that finances and money management and taxes had on my business and on my creative life until it got out of control, until uh for a couple of years, just to give you a quick you know summary of my life. I was uh living in uh and raising children, but living in South Dade, which is an area in South Miami, and raising our kids, and I had a job as a music minister, and so I had that income, and then I was also doing you know short, small gigs, but not a lot of it. And we were homeowners, and so there were a lot of financial things that were different back then as we were raising our kids, and you know, things are just different, so you have this deduction and all these different things. So I didn't end up spending a lot of time thinking about finances back then, even though I should have been paying attention. But something happened about three or four years ago when I became totally a freelancer and was working pretty much full as an uh independent contractor, and I found myself not paying attention like I should have. Certain things dropped off, kids got older, certain deductions disappeared. Lo and behold, let me just give it to you straight. My tax bill went through the roof. I did not pay attention to it. We got nailed, we got hurt basically financially, because I dropped the ball as a musician, as an entrepreneur, really as a business person. I took my eye off of it because I just thought, oh well, things will pretty much be the same. I'll still earn money, I'll figure out, like, you know, how much to pay or whatever, and it won't be a big deal. And it turned out to be a huge deal. So, what I'm gonna share with you today are three ways that I changed that, that I turned around my perspective, stopped being scared of taking uh control of my taxes, control of my financial life as a creative, and how it has, in just a couple of minutes, I'll you know, try to wrap this up because I'm not gonna give you an entire synopsis of my financial life. I don't think you're interested in that, but I would think you'd be interested in how I've saved thousands of dollars and cut that what mountain of what seemed to be an insurmountable uh burden on my family and on my creative life. Because trust me, if you are stressed about money, you're not gonna be as creative as you could be because that elephant is in the back, just like bugging you, like, oh my gosh, what am I gonna do about this? Because I have to pay this bill, or I have to take care of this tax bill, or I don't know how much I'm going to owe, or I don't know where my receipts went. I don't know if I'm gonna be able to like take this deduction or that deduction. And that stress and that inability to really handle that can become a big issue in your life. Let's see if I can check this real quick, make sure that we're looking in the right place. So, what I would love to do as I look around, I'm trying to make sure to look at the camera and try to look at you guys at the same time. So, what I would love to do is share three things that I did to get really clear on my finances and make sure that I knew what I was spending, how to get the best advantage of it as a creative entrepreneur. Because here's the thing if you're creative, I hate to tell you, but you are in business. You are in business, and if you are in business, at least in the US, as I'm talking again, this is for my US audience, those of you who are spending money to create, you are making money from creating, you are a business, and the government, as you might want to check out, the best uh I guess resource I could offer you is not even what I'm sharing today. It's my interview with Jake Randall, who's the CEO of a company called Taxbot. And he broke this down better than anybody, better than even I can. But the government wants to reward businesses, and as you've seen over the pandemic, they have done a huge amount of loans and grants and programs for businesses. And those of us who are creatives who were organized and treating our business like a business were able to take advantage of a lot of those programs. However, if you weren't, if you didn't have records, if you hadn't incorporated and you haven't done all those things, well, you probably had a hard time qualifying for those things. And it's the same thing now that I know the tax deadline has been moved, but it's the same thing now. If you're not taking advantage of all of the potential savings and the potential record keeping tricks and tips that can keep your tax bill to zero or, you know, refund or whatever you call it. But the most important thing is that you're not spending money and not becoming burdened by this because you're actually focusing on the right thing. So I'm going to give you three quick tips that helped me to save thousands of dollars on my tax bill as a creative and change that mentality from feeling like I was overwhelmed to really feeling like I was in total control, even as of this time, I'm compiling records and getting ready for this year's filing, and I'm really not concerned. I feel good. I know that all of my records are done. I know how much I've spent, I know how much I've earned, I know where to find it, and the system is now in place. So let me tell you first what I did. Number one, what I first did was that I really got honest and I got serious. And nothing will get you more serious than a certain letter from the IRS. Anything with IRS audit will get you, you know, will get your attention. And so what I did was I took a look at that and I said, wait a minute. Okay, I'm I'm number one. Obviously, I'm a I'm a husband, I'm a father, I'm a business person, I'm responsible. God has given me resources. I'm supposed to be a good steward of those resources. What am I doing that is not really taking this seriously? How am I not taking this seriously? And so I had to take it seriously. I had to stop taking it like, oh, well, I'm a creative, I don't do money well, I don't do finances well, I lose receipts, I'm ADD, things are hard to keep up with. I had to get serious. So the first thing was a change in my mentality. Getting serious about the fact that I was a business person. So once I got serious about that, everything changed about the way I approached it. I stopped just saying, well, I'll just spend money here, I'll just pick up this keyboard here, or I'll just grab this and throw away the receipt. And it stopped being uh just about the music and just about having fun and just about performing. It became, I have to track this stuff, I have to pay close attention to this stuff because everything I do is affecting my bottom line. And I have expenses, I have liabilities, I have assets. Those words might sound very uncreative, but by thinking that way, getting serious about that really changed the way I looked at my creative business and God engaged everything you see around me. This is all a business, and it's something that I can't do well, and I can't do the best of my ability if I don't focus on the right things and get serious about it. So, my first tip to anyone that's dealing with that kind of, oh, I don't want to deal with finances and money management and being a business, I don't, that doesn't, that's not me. I'm a I'm a maker, I'm a creative. Well, you're both. You are a creative, you are someone that can create and make, but you also have to be someone who can track, record, and be a sound and savvy business person. You can't have it both ways, you can't want the glory and the wonderful feelings of making stuff and then ignore the business side of it. You're going to find yourself like I did, like staring down the barrel of a huge uh uh uh canon of problems and financial worries that are going to take your mind off your creative life. And you're not gonna be able to focus, and you're not gonna be able to have as much fun creatively if you are letting these things slip and then finding yourself with either tax bills or debts or other things that you could have avoided and not taking advantage of all these opportunities to keep more of the money that you make as a creator. And this is doesn't matter what your income is. As a matter of fact, I'll tell you honestly, this is better if you're not making money yet, and you start this way and you start thinking like a business before you're making money, before you have an income. Because trust me, once you're making money, it gets a lot harder to go back and try to figure out what you did if you weren't tracking it from the get-go. So the first thing I did was I got serious. The second thing I did was that I started to really get good advice. I got help, I got people in my corner who know this stuff. And I keep glancing off to the side because Mike, I'm gonna do this real quick because this is driving me crazy. I know you guys are probably saying, What is he looking at? But there we go. That's a little better, so now I can look directly at you guys. So the second thing I did is that I started really getting serious about. I'm sorry, I said that first getting serious. The second one is I got advice. Let me see if there's any, let me make sure there's any chat going on. I'll make sure to check it out. Okay. So the second thing is I did is I got advice. And the way I got advice is that I went not to even other creatives in this case. I didn't go to uh an accountant necessarily that was a you know music-only specialist. And I know that might sound strange, and I might you might think, oh, I'm gonna suggest going to an accountant or going to, you know, a uh a financial planner who has expert advice in music or in creative life, which I do recommend, by the way. That's not something I wouldn't recommend, but in my case, I want to be transparent. I went to people that simply had a wealth of financial knowledge. And I joined a mastermind. I did join a mastermind. I didn't just, you know, read up on YouTube, I didn't just go to Google, I joined a mastermind of creatives, but not just creatives, business people, um, real estate agents. Um, there were people all across the entrepreneurial spectrum in this group. And um, by the way, if you're interested in it, it still exists. Um, I'm still uh I've taken a break from the actual mastermind this couple of months, but I'm probably gonna jump back in. Um, and it's called Taxbot Midas, but I'll tell you more about it in a second. But it's a mastermind group, and I was able to go to seminars, webinars, and the tips and tricks I got during my time around those other entrepreneurs, people who weren't just running my kind of business, that's my key point here. They weren't just running businesses that I run, the kind of business I run. They ran businesses that have millions of dollars or hundreds of thousands of dollars, businesses all over the world, all over the country. And I just don't need it to be around people who are making business decisions. I didn't need necessarily in this case to be around other creatives, even though that would be great. And there's other creatives and even in this community that can help and who know about finances and know how they've built businesses. But in my case, I just needed to get around other business people. And once I got around other business people, that's when I really started to see some change in my attitude and in my ability to actually make some changes in my financial records and my keeping, my record keeping, and how I um even evaluated what I own and my assets and whether I could deduct this. And oh, you know what? This car and where I drive and how I drive affects how my bottom line of my taxes go down. And so that made a huge difference. Some of the little tips I learned during that mastermind have saved me thousands upon thousands of dollars. Just by one little tweak, by changing of a number, and this is all ethical, by the way. None of this is cheating the system, none of this is trying to get out of money that I legitimately owed. But if the government is really working in my favor, which it should be, because I am paying taxes all through the year through, you know, deductions and all that kind of stuff, and your your um and you know, the payroll deductions, I'm already paying, I'm I'm doing my part. And then the government says, if you do this as a business person on the on the side as an entrepreneur, we're going to reward you, we're going to give you these advantages, and I don't take advantage of them. Well, that's not anyone else's fault but my own. And so that's why I'm so glad I got around people. So that's my second tip is don't just look to get advice from people that you know, the person down the street, oh, I know this guy. No, make sure you look for people who are qualified, who know what they're talking about. Again, if you're interested in finding out about that resource, TextBot Midas. I'll tell you more about TextBot in a second because that's the system that I'm going to do with part number three and kind of tell you how this really happened. But that was the second key that really turned things around. Just a couple of tips from smart people who knew what they were talking about and getting and spending money. I did spend some money and I invested in getting the right kind of advice. So for you, that might be an accountant, for you that might be a financial planner. For whatever way it is, you got to get in the right frame of mind and you got to get the right advice. Okay, so get serious and then get help, get good advice. And third, I got a system. I picked up a system, I picked up a routine, I picked up a tool, something that would help me to get a system of keeping records and tracking my information. And this could be again, for many of you, it's pretty simple. It's a financial plan, uh, financial budgeting system. It's something online like QuickBooks or Quicken, or in my case, again, it's called TaxBot, or there's um Mint, or uh You need a budget. It's called Wineab. Um, and these are all different apps that either track your money, help you save money, help you plan your money, and more importantly, in my case, directly helps you keep track of deductions and driving and mileage and things like that. Using that system, figuring out that system, figuring out how I could get my emails to give me my receipts. So now all of my receipts are going through email, and all I have to do at the end of the year is download them all. Little things like that, getting a system where it wasn't overwhelming. I didn't have to think about it all the time. Using um my app with um my tax box app, I can just tell it, hey, I just went here. It's a business expense, I can talk to it, and it's really cool. And I tell, you know, hey, this is a voice memo, this is where I went, this is how much I spent, this is where I drove, it tracks me automatically. And that system, again, if you want to just look at how things change, I went from staying up for you know six, seven months trying to like recap and figure out what the heck happened in my financial life to now this year, again, within a couple of days, I'll have all my financial records ready and I can just send them to the accountant and it's done. And I know for a pretty good uh have a pretty good inkling that everything is solid that I won't be hit with some big tax bill because I've been tracking it and the peace of mind is unbelievable. It frees me up to do things like this. Like I I wouldn't jump online, I wouldn't jump on uh live if I had you know to deal with a crunch and stress of having to get finances in order right now, but I can kind of rest easy knowing that uh number one, the deadlines have been moved, which is a blessing. But number two, knowing that it's only going to take me a couple of days, a couple of weeks, a week maybe, um, to compile everything because I know where everything is and the system worked um using my app, which is Taxbot. I use Taxbot. And if you're interested in Taxbot, definitely go to guiding geeks.com slash taxbot. It's T-A-X-B-O-T, um, because I have a arrangement with them where you can get two weeks free of their app and check it out and see how it can track your information. But the most important thing I want to share with you is again, whatever system you choose, choose a system, get in your your system that works for you, whether it be spreadsheets, whatever it is, stop making excuses about why you can't track your money, why you don't know what can be deducted between mileage, between your driving, between what you buy, between having either your home office or whatever it is. These are all things that can make your tax bill go from here to here. And if your tax bill is not high, well, guess what? There's things called refunds. And so I know a lot of people like to get refunds, and maybe you have never really taken advantage of that because you again didn't really think it was a big deal. Well, I'm telling you, you're missing out on one of the biggest ways to boost your bottom line as a creative, relieve stress, get that out of your life so that you can really focus on the creative life that you want to focus on. And by the way, more money absolutely helps that because you can do more of what you love and more of what God bless you to do because you're taking better uh care of the resources. Okay, so those are my three tips. Get serious, get advice, get a system, do those three things because that's how I can say now that I went from being overwhelmed to totally confident about how I'm tracking my finances, how I'm tracking my deductions, how I'll be able to file in 2020 and 2021. And no matter what happens with COVID and the pandemic and the different laws, um, obviously I've, you know, again, I've I've paid for the right kind of investment uh in uh accountants that I trust that will help me navigate that and the advice that I'm getting from them. And that's where I am now feeling that total relief of stress that I used to feel when it came down to April 15th. So again, this year, 2021, you got another month. This is kind of like a, you know, if you if you haven't been dealing with it, it's kind of late uh to jump in right away. But I would suggest, again, check out a system like Taxbot, guiding gigs.com slash Taxbot to help you start tracking for 2021 so that you can have a much easier time with 2022 when it's time to file or whatever extensions you do, whatever that is. You know, I don't want to get into the weeds of when to file and when not to file and when to get your stuff together, but let's just put it this way. Well, my friend, I hope you got what you needed out of that talk, out of my testimony, out of my story, where I was overwhelmed, where I was fearful, where I was dreading getting letters. In the mail from the IRS. And again, as a creative, as a professional creative who wants to spend the majority of my time thinking about how I can make things, how I can create, how I can be more active in my creative life, spending time thinking about what the IRS might do, or whether I'm taking advantage of things, or whether I've got enough money coming out of this paycheck or that paycheck or this deduction or that deduction without a system was robbing me of my creative potential. It was robbing me of the time that I could have been focused on my creative life. And it meant that I was not taking advantage of the laws and the procedures that could make my business even a better business as a creative. So all of that I've said is just to encourage you to not follow in my footsteps when it comes to mistakes, but follow in my footsteps when it comes to my solutions. Okay. So check out Taxbot as I've mentioned a couple of times. You can look at the links in the show notes for all of our resources regarding Taxbot. But whatever system you decide to use, adopt the system, jump in, get going with your tracking and with your uh financial management for this year. Whenever you're listening, it's not too late to start. But if you don't start, it is always going to be too late. Okay. So as I didn't introduce myself, thank you so much for listening. If you're new to the show, my name is Alan C. Paul, and I'm the host of this show, and I've been sharing my story with you. But I hope you'll continue to connect with me and the God and gigs community through all of our social links, always God and gigs on all social networks. And also make sure to check out our blog guidandgigs.com where we have tons of resources and a new membership that I'm talking about. I'm going to be on a podcast if you're listening in April very soon with the flipped lifestyle team, Shane and Jocelyn Sam's, where they coach me on the God and Giggs membership that we are launching. And I'm so excited because after taking a lot more of Shane's advice, I am now getting ready to share the God and Giggs new mastermind membership with my community. It is so exciting and so incredible to come after all these years and finally have a place to invite you to. So if you want to find out more about that, you got to check out flippedlifestyle.com and follow that podcast and then check in with us when you see the God and Giggs membership coming into fruition and coming into existence. It's already kind of going into the beta mode, but we're going to be bringing it out for all of you. But I want to make sure that you're there. And so if you're a creative of any kind who has a faith-focused foundation and you want to be around other creators like you, we are building a home for you. This podcast is just part of that home. The website is part of that home, but we're going now to now have a membership that will fill in all the gaps of your spiritual, your business, and your creative life so that you can always find the solutions you need to find and have the people around you who will make sure you never feel alone in this journey. You will always have a place where you can ask questions, feel like you are seen, like you are heard, like you are noticed, like people understand you because they know that you are a creative, building a better life from the inside out and using these principles in the real world of the creative space that you're in. Okay. So all that to say, make sure you stay tuned. Check out godandgigs.com. We're going to be posting more links about our new membership very soon. That's it for now. Thank you so much for joining me in this podcast, and we will see you next time. But until then, continue to become the creative you were created to be. Okay, everybody, be safe out there. God bless. See you next week.

SPEAKER_01 25:57

Thanks for joining us here at the God and Gig Show. Please leave us a review on iTunes, like our Facebook page, or visit godandgigs.com and tell us what you thought of this show. We'll be back soon. In the meantime, go create something amazing.