Remember To Pay Your Taxes

I learned a little something about taxes this month.  I learned that ignorance does not excuse you from paying what you owe.

Six years ago when I started Mongo, Angry!  Mongo Smash!  I had little hope of ever turning any kind of profit.  I mean, after all, it’s an Internet business with hardly any overhead, manpower, or buzz.  Three years later, I went from zero profits to needing a 1099 and the meager empire was just taking its first breaths.  2010 was first year I had to do any kind of real tax consideration for my shirt sites.  I worked it all out with my tax guy and unfortunately, my return was cut in half that year.

This past year saw an increase of about 20% in revenue, while maintaining less than $500 of actual cost of ownership.  Seems great right?  It was until I saw my tax forms. 

I owed as much as I had coming back to me last year. 

So, where did I go wrong? 

I turned a profit.

That sounds a little ridiculous but it’s the truth.  Well, that and I forgot to pay the quarterly 1040 payments on the business.  Seeing as how my family’s income and my self-employment income all fall into the same bucket, I thought I was already paying on it.   Apparently not.  There’s a little thing called a 1040-ES that needs paid every quarter.

See, when you have a regular job with regular deductions from your paycheck, you don’t think about those things.   When you are the business owner and are only getting a 1099 from the sites you do business with, the responsibility falls on you to pay those taxes.

Unfortunately, Phase 2 is Pay Your Taxes.

So, I have to pay last years, plus a penalty, and the first quarter of 2012’s putting me in the red from the starting gate. 

I plan to meet with my tax guy after the end of the busy season and discuss deductions.   For one, I use a room in my house as an office.  That’s a total year of my electrical bill divided by the number of rooms in my house.  Then I can claim that.  I can also probably do that with my Internet connection since more than 75% of my Internet is devoted to shirt work.  I pay $60 a year to CafePress for a premium shop, $10 a year to Zazzle for free ground shipping, and I spend around $200 to do giveaways throughout the year.   Granted, I should be able to deduct my cable bill, my Entertainment Weekly subscription and my car since I will be making it an advertisement tool.   But, let’s not go from making t-shirts to making license plates, just yet.  Slow steps.  That’s how it works in my business.

Well, that’s your newest tip for success.  As always, I serve as an example of what not to do for your benefit.

Peace out!

Mass Entitlement

Recently, the gamers of the world went after EA and the makers of Mass Effect 3 because they didn’t like the ending. In turn, BioWare is supposedly appeasing fans by providing a better ending.

Can you imagine another instance where the fan base had that much impact or influence on the way a company markets a product? Are customers more savvy? Are they less accepting? Are we too entitled?

I say “Too Entitled” because there was talk of a lawsuit. Really, gamers? Since when did the public get the ability to sue a video entertainment company because it didn’t like the product? Did us 30 year old+ fanboys sue Lucas for the Prequel Trilogy? Did we sue Spielberg for putting Aliens in the last Indiana Jones movie? No on both counts.

I expect value for my money, but at the same time, if I buy something that turns out to be crap… I just don’t buy anything else. I take to the Interwebs and complain like a child. I sell it to Game Stop for something else, recouping a small portion of my money. I don’t SUE THE FREAKING COMPANY?!?!?

With the distance between consumer and company shrinking every day thanks to social media, people tend to feel more entitled to voice their opinion directly at the source of their ire and demand some kind of retribution. It may be the best thing to happen to business by allowing more accountability for crap performance, leading to more quality in the future… or It will continue us on this trend of feeling that the squeaky wheel demands oiling above actually changing the wheel.

I liken it to the shift in the teacher / parent relationship where, when I was growing up and a teacher gave my parents a bad report, I was the one responsible for the problem. Nowadays, parents tend to say their kid is an angelic innocent and it’s the teacher’s fault. Get over it. Not every soccer game ends in a tie. Your kid is the instigator. The game world does not bow to your every whim. I get it, though. EA has a bit of a bad model; price things pretty expensively for a base product and then offer multiple micropayments for more, expanded content.

Still, social media has given the consumer another arm of contact and sometimes, depending on the company, it can yield positive results. But there is a responsibility as a consumer to act in a certain manner and, in turn, the company might do you a solid. Be a pissy customer and the company may just ignore you. Though, judging how BioWare is responding to the Mass Effect 3 issue, get enough pissy customers and you can change the world. But for the better?

Maybe we aren’t ready for this kind of interaction yet. Maybe we have been given the Twitter equivalent of the fire from Mount Olympus. We are still too young to wield it without burning down our village. Think of how well we adapted to QR codes. That was sarcasm. We haven’t. In fact, I saw perhaps the stupidest form of QR code placement.  It was on the back gate of a Tyler Mountain truck, driving on the Parkway East.

That’s safe.

“Hey, buddy, while you’re driving on a highway, tailgate us, whip our your smart phone and line up a camera shot of this small code on the back of our moving truck so you can go to our website… while you’re driving.”

What could possibly go wrong there? Well, maybe if you wreck, you can sue the company or take to social media and bring about restitution for your hardship. Because that’s more important than actually taking steps to prevent something bad from happening.

Here’s another little tip for you. Don’t buy a hotly anticipated game the nanosecond it comes out. Wait a week or two and see what other people have to say about it. You don’t have to be spoiled by others reviews… just cautious of the response. Can we do that?

Now, back to the early planning stages of my massive class action suit against Michael Bay for making the Teenage Mutant Ninja Turtles aliens.  Gotta get this done before a single shot of movie has been filmed.

Mega Loser

I didn’t win. None of us won. We had 44 people play $4 each to the tune of $176 worth of numbers and we cleared maybe $15-$17 in winnings. Roughly $0.33 each.

But man, the hype. The Mega Millions made the rounds of two awards shows as joke fodder. The Kids Choice awards and the American Country Awards both had mentions of the big jackpot.

As for myself, I played $20 and even played the numbers from LOST.

Guess what? I lost.

But now that Mega hype has died down the real issues arise. The scandals.

When will people learn? If you are the coordinator of your work’s lottery pool, you need a little CYA quality assurance.

For me, I took the ridiculous task of coordinating efforts, collecting money, buying tickets, and giving out bad news.

But I was smart about it. I collected all the money ahead of time, giving people a Wednesday through Friday window of opportunity. I made sure to offer inclusion to anyone in the office. And then I went to buy the tickets somewhere that I could do without the lines and madness, to ensure that everything was right.

I walked into the local beer distributor near my building and had complete attention of the cashier. She took all my cash, we counted it twice and then we counted the tickets twice to make sure we had the exact number. Then, I scanned all of the tickets into pdfs and emailed them to all of the participants. That way, if we did win, and I stress “IF”, I had no chance to have that awkward, “Well, I bought the winning ticket separately” moment. In fact, I did buy mine separately, later at a completely different location.

Why don’t people get that? We’ve already seen two cases recently in the news where the winner claimed to have bought the ticket separate from the group they bought tickets for and the first one ended up being decided in court, in favor of the coworkers. How does this lady from a Maryland McDonald’s think she’s going to get away with this? Unless she made two separate purchases with different amounts of money and they can place the winning number into the second pool that was her own purchase, she’ll have to share the winnings.

Sometimes lotteries bring out the worst in humanity. You can imagine a tight knit group of people turning on each other like it’s a bad movie. Even with the prospect of the most evil aspects of human nature taking over, I’d still want to win. I mean, duh!

I’d just be smart. Immediately sign the back of the ticket. That’s tops overall. The last thing you want to do is misplace it where someone else can find it. Next, contact a lawyer and get a financial person involved to set up a trust or some kind of shelter so that you can’t take advantage of your urge to go Brewster’s Millions with the winnings… especially, since you may not even have them yet. Then plan the exit strategy.

I say exit strategy because as soon as you go public with the news that you’ve won, you will be inundated with all sorts of ridiculousness. I do think that I would at least treat my family to a week or two long vacation on me at a nice beach house to plan what to do. I’d want to include them somehow, but for everything else, I’ll probably go off the grid.

The fact that the at least one of the winners, scandal or not, has been identified is probably a bad sign. That kind of thing you want to drag out as long as you can. I want enough time to get all my ducks in a row before the world comes crashing into my life.

So, I guess not winning is kind of a blessing. Then again, they keep saying that money can’t buy happiness. Fine, challenge accepted.