Eye Dee Ten Tea

Magic TaxesSound it out . . . Eye Dee Ten Tea . . . It could also be written like this: I D 10 T  . . . sounds like “Eye Dee Ten Tea” but looks like “IDIOT.”

That’s a disease many people suffer from . . . Eye Dee Ten Tea. I’m no exception. Last year (2009), I invested a lot of money in my business. I spent a lot of money on advertising, marketing, product, travel, etc . . . I often spent money during periods of slow sales and slow gigs. That’s not so bad, but what makes me an I D 10 T sufferer is that when I spent money, I just threw the receipts and invoices, etc into a box.

When it came time for taxes (April 15, 2010), my “paperwork” was such a mess that I had my Accountant (Bill Brough) file an extension, which gives me ’till October 15, 2010 to get everything in order for him. Of course my box o bookkeeping was a disaster, so I waited until the last minute to get everything to him.

So my taxes were filed on October 15, 2010. The last possible minute that they can be filed without a fee. Here’s the kicker – because I wasn’t paying much attention to managing my books, I was investing personal money into my magic business when I didn’t need to. In the past couple of years I’ve pretty much stopped performing gigs. I still perform for friends and family, etc, but very rarely do I take a paying gig these days.

I’m enjoying the life of writing a monthly magic magazine, selling my creations, writing books (and DVDs), and doing the occasional lecture. That being said, the money is no where near as rewarding as when I was performing. Because of my shift in focus, most years in my business I take a loss or barely make a profit. This year was the first year I really made a profit, but I didn’t even know it until 2 weeks ago when I finished taking care of my books for my tax preparer/accountant. Sad. So of course, I’ve resolved to take much better care of the business of my business. Of course, 2010 stuff is just as bad as 2009, but moving forward, things will be much better. Basically, all I did was create a spreadsheet for my three major accounts. One for my bank account, one for my PayPal account and one for my cash account.

Basically you just need a few columns:

  • Date
  • Category
  • Dollar amount

Everything you spend or receive is just entered into this spreadsheet. Then you can create sum calculations to keep you informed how much you’re spending and earning. It’s simple advice and simple to do, but that didn’t stop an I D 10 T like me from screwin’ it up. It all comes down to “just do it.”

If you want to read my tax man’s perspective on this very issue, check it out on his site: Bottom Line SLC.