There’s one month left in 2018! So, what should you do for your streaming business and personal finances with the last month of 2018? Unfortunately, there are some opportunities that close off at the end of the year. Fortunately, you’ve still got time to implement them!
Business
Create a Profit and Loss (P&L)
A P&L documents what your business has earned and spent this year. I wrote more in depth about it here.
The main importance of this document is the information it gives you. With an accurate P&L you can make good estimations on any tax you might owe, what you can pay yourself, can find areas of improvement, and can compare against previous years to track trends.
Cash flow is the lifeblood of your business. Don’t neglect monitoring and reporting it.
Prep your quarterly tax payment
Taxes! You should be paying them more frequently than annually. That way you have a better sense of how things are going and aren’t burdened with a giant bill. Plus, you’ll pay less in penalties and fees if you’re paying quarterly.
Check out my article on quarterly taxes here.
Also, don’t forget to write off your home office.
Reflect and project
Ernest Jones (a CPA) and I discussed this recently on our YourBrandYourBusiness show. Here’s the link to the VOD.
Anyways, the crux of it is that you’re responsible for running your business. A part of running that business is looking back at how you’ve done and looking forwards to what you hope to do in the coming year.
When you’re reflecting back make sure to compare your metrics to previous years. Are going growing? Shrinking? Staying in the same place? What were you trying to accomplish? If things are good, what did you do that you think contributed? Similarly, what didn’t help?
Once you’ve done that it’s time to look forward. What is one or two major initiatives you can take on in the following year? Sometimes it’s being on a more consistent schedule, updating the art and style of your channel, or trying out something new for you.
Decide on timing your expenses
This one’s pretty simple but again I have a quick, terrible video on it. If you have some big upcoming expenses do you buy them now or defer them?
For instance, I need to get a new PC and buy my flights for PAX East. We’re looking at $1.5k-$2k there in costs.
While I could buy them now I’m electing to defer those costs to 2019. My reasoning is that I’m on track to earn a ton more next year. By deferring those expenses I write them off against higher income and get more of a tax benefit. Yay me!
Incorporation
You’ve probably heard someone else mention that they’ve incorporated their business. Generally, streamers go the Limited Liability Corporation (LLC) route.
There are a couple of reasons you might incorporate. First, there are legal protections. I’ll leave discussing those to a lawyer. Next, there are some tax reasons. If you’re working with a good CPA (I’ll always recommend Ernest) then you could potentially save yourself some money in self-employment taxes.
Don’t incorporate on your own; this is an area where you should for sure talk to a lawyer and accountant.
Personal
Retirement plan contributions
If you have some extra money left over you might contribute it to a retirement account to start investing for your future. You can often save yourself a lot in current taxes this way, especially when you’re self-employed.
Roth conversions
Sometimes it makes sense to take money you have in a traditional IRA and convert it to a Roth IRA. That just changes how it’s taxed in the future but it also increases your current taxable income. If you’re in a lower income year (perhaps because you just went full-time streaming) then it could make sense to seize some advantage from your low tax rate. A Roth conversion can do that.
Generally you want to have options in retirement and having different accounts with different tax rules helps with that. My wife and I have been aggressively converting our traditional assets to Roth assets while my business got up and running. Our logic is that no matter what we’d be earning more in the future, either because business takes off or because it fails and I get a job that pays well.
Health insurance
US health insurance is all kinds of screwed up, especially if you’re self-employed. Open enrollment for health insurance started in November and goes through December 15th.
I have a guide on health insurance for streamers here. It’s somewhat long but very important. December 15th is NOT a deadline you want to let pass without getting insurance coverage.
Reflect and project
This is the same as it was for your business. Taking the time to reflect on where you’ve been and project where you’re going (or where you want to go) will help you improve.
Conclusion
You can help yourself out by using December to get your ducks in a row on the business and personal financial side. There are a lot of things you could possibly do. While it’d be great if you did all of them if that’s not possible for some reason it’s better to at least do a couple.
You don’t have to figure this out alone. This is what we do- help streamers make great money decisions. If that’s something that sounds interesting to you reach out me or schedule some time for a free consult. You can check out what I do here.
