Latest / Influencer Confidential / If You Make $50k As A Creator Watch This #288

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If You Make $50k As A Creator Watch This #288 · Influencer Confidential

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  Speaker 1: Welcome to Influencer Confidential by Sidewalker Daily. My name is
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  Speaker 1: Nina Zeta and I will be your host. I love
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  Speaker 1: working with brands and influencers on all things business strategy.
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  Speaker 1: Are you ready to learn what it takes to work
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  Speaker 1: in this influencer industry and see behind the curtain? Well,
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  Speaker 1: let's jump in. If your net income as a creator
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  Speaker 1: is over fifty thousand dollars, you're going to want to
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  Speaker 1: pay attention to today's video and episode because we're going to
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  Speaker 1: dive deep on some topics that are a little complicated
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  Speaker 1: but are going to save you a lot of money. Now,
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  Speaker 1: maybe you're not at that fifty thousand net figure yet,
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  Speaker 1: but you're on the way and you are growing. You
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  Speaker 1: should definitely go ahead and take notes as well, because
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  Speaker 1: what we're going to be covering is more of a
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  Speaker 1: business lesson to my creator community, and I'm going to
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  Speaker 1: do my very best to make it as simple and
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  Speaker 1: easy as possible so that you guys can digest it. Now,
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  Speaker 1: when I say net income, that means after your expenses.
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  Speaker 1: So if you make one hundred thousand dollars a year
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  Speaker 1: and your expenses are fifty thousand dollars, then you are
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  Speaker 1: netting fifty thousand, okay, And this income doesn't just have
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  Speaker 1: to come from brand deals, you guys, is because just
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  Speaker 1: your creator income in general, what your affiliates with, your
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  Speaker 1: group trips with, whatever it is that you're doing all right,
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  Speaker 1: because at that income level, the way you are set
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  Speaker 1: up legally in your business really matters, and you could
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  Speaker 1: be leaving thousands in tax savings on the table if
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  Speaker 1: you're not doing it right. So let's start at the basics.
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  Speaker 1: What type of business entity are you? So a lot
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  Speaker 1: of creators when they first get started, they start off
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  Speaker 1: as sole proprietors, and then many of them will become
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  Speaker 1: LLCs at some point in their journey. I'm sure a
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  Speaker 1: lot of you are listening in right now probably have
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  Speaker 1: an LLC setup. LLCs are super popular because they separate
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  Speaker 1: personal and business liability, they're easy to set up, and
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  Speaker 1: they're affordable. But from a tax perspective, an LLC alone
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  Speaker 1: may not be the best way to optimize your savings.
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  Speaker 1: So you may or may not be familiar with the
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  Speaker 1: term es corp. That's what we're going to be talking
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  Speaker 1: about in today's episode. Now, just so that you guys,
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  Speaker 1: note this isn't something that you form. It's something that
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  Speaker 1: you elect. You electes corpse status with the irs. So
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  Speaker 1: if you are an LLC, this is something that you
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  Speaker 1: would elect to get tax. As anes Corp. You can't
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  Speaker 1: do this as a sole proprietor, okay. So it's kind
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  Speaker 1: of like this upgrade path that once you're making a
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  Speaker 1: certain amount in your LLC, you can be like, oh,
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  Speaker 1: I want to elect to be taxed in this way.
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  Speaker 1: So when you're an LLC, all of your profit is
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  Speaker 1: subject to self employment tax, So it could be anywhere
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  Speaker 1: around like fifteen percent of your net profit is going
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  Speaker 1: to get this self employment tax. Okay. But with anes Corp,
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  Speaker 1: you basically split up your income into a salary and
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  Speaker 1: then distributions. So your salary is subject to payroll taxes,
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  Speaker 1: but your distributions are not subject to that self employment tax.
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  Speaker 1: Don't worry. I'm going to give you an example to
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  Speaker 1: break it down so you can visually see what I'm
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  Speaker 1: talking about. So the way it typically works is you
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  Speaker 1: are going to pay yourself a very reasonable salary and
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  Speaker 1: then the rest of that money that you're making those distributions,
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  Speaker 1: they're not going to be tax that extra self employment tax,
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  Speaker 1: and that is where the big savings comes from. Okay,
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  Speaker 1: So let me give you an example to help your
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  Speaker 1: brain see it. Let's just say you net one hundred
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  Speaker 1: thousand dollars. Net one hundred thousand dollars. If you were
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  Speaker 1: just an LLC that did not elect to this S corp,
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  Speaker 1: you would be tax around fifteen percent. So let's call it.
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  Speaker 1: Fifteen thousand dollars of that one hundred thousand dollars would
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  Speaker 1: be your self employment tax. Now this is before federal
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  Speaker 1: and state taxes as well. Okay, so just off the top,
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  Speaker 1: you're taking that fifteen percent off. Now, if you are
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  Speaker 1: ANES corp, that fifteen percent self employment tax is only
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  Speaker 1: going to go off the salary. So remember their salary
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  Speaker 1: and distributions. So again, let's take that one hundred thousand dollars.
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  Speaker 1: Let's say we pay ourselves in salary forty thousand, and
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  Speaker 1: then we put sixty thousand in distributions, So that fifteen
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  Speaker 1: percent is going on the forty thousand, not on thee
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  Speaker 1: hundred thousand, right, So that self employment piece is forty
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  Speaker 1: thousand times fifteen percent. It comes to around six thousand dollars.
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  Speaker 1: Now that other sixty thousand dollars is not subject to
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  Speaker 1: the fifteen percent you know, self employment tax, So the
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  Speaker 1: other sixty k basically is protected from them. It's still
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  Speaker 1: gonna have federal and state income tax, but it's going
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  Speaker 1: to avoid that self employment tax. So in our original example,
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  Speaker 1: the one that wasn't anes corp, we're paying around fifteen
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  Speaker 1: thousand in taxes in self employment. In our new example,
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  Speaker 1: as an elected s corp, we're now paying around six thousand,
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  Speaker 1: and that is around a nine thousand dollars savings in
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  Speaker 1: taxes a year. So that is why when you hit
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  Speaker 1: a certain number financially, you want to make sure that
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  Speaker 1: your company is set up to take advantage of these
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  Speaker 1: tax savings now, just so that you know be because
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  Speaker 1: you are now let's just say an elected es corp,
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  Speaker 1: it doesn't mean things are free. There are also hidden
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  Speaker 1: fees that you're going to have to take care of,
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  Speaker 1: but a lot of times when businesses do the cost
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  Speaker 1: benefit those fees, you still save more in the long run.
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  Speaker 1: One of those fees are setting up payroll, like because
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  Speaker 1: now you have a salary, you need to put yourself
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  Speaker 1: on payroll. And obviously there are fees to be part
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  Speaker 1: of different payroll systems. But again for many people. Once
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  Speaker 1: you're hitting a certain income level, it is obviously worth it.
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  Speaker 1: So here are some common signs that you're ready to
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  Speaker 1: almost upgrade to an escort. Right, Remember it's not a
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  Speaker 1: different entity. You're still an LLC, but now you're getting
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  Speaker 1: taxed differently as an escore. So here are some signs.
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  Speaker 1: Obviously consistent brand deals or revenue coming in. You are
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  Speaker 1: looking at your numbers and you're like, wait, this is
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  Speaker 1: not just like hot and cold. I know that my
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  Speaker 1: company is making a certain amount. The reason we said
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  Speaker 1: fifty thousand net because that feels like it needs to
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  Speaker 1: be the minimum. If you're at seventy five thousand net
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  Speaker 1: one hundred thousand net, you should absolutely consider electing to
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  Speaker 1: be an es core because that is a tell sign
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  Speaker 1: that you are ready to do so. If you have
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  Speaker 1: predictable income, if you have monthly retainers, if you feel
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  Speaker 1: like your business is financially safe and ready, these are
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  Speaker 1: all great signs that you're ready to do this. Now,
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  Speaker 1: let's just say you are ready to switch how your
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  Speaker 1: company is being taxed and you're ready to elect as
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  Speaker 1: an es core. You are going to have to look
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  Speaker 1: into payroll. This is the first thing that we did. Anyways,
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  Speaker 1: a lot of people have Askedminina, who have you gone with,
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  Speaker 1: especially when I'm dealing with creators who are like making
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  Speaker 1: serious money and we're talking about their businesses in this way.
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  Speaker 1: We personally, at our company at Sidewalker Daily, we have
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  Speaker 1: been using Gusto forever and we have nothing but good
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  Speaker 1: things to say about it. It has such an easy dashboard,
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  Speaker 1: such an easy interface, because like for some of us,
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  Speaker 1: these like number of things can be really intimidating and scary.
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  Speaker 1: I love they have like really amazing customer support. They
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  Speaker 1: make it really simple to sign on just visually. It
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  Speaker 1: is very easy. The payments are automated. I love Gusto
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  Speaker 1: because it just makes payroll really stupidly simple. That's really
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  Speaker 1: the bottom line. It makes it really really simple. It's
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  Speaker 1: built for small businesses. Creators are small businesses. You don't
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  Speaker 1: have to have a lot of employees. You could be
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  Speaker 1: the only employee, right, But it's built for us. And
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  Speaker 1: it also is very contractor friendly. So if you're like
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  Speaker 1: hiring a photographer or hiring a makeup artist and you
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  Speaker 1: need to file like you're ten ninety nine's and all
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  Speaker 1: of that, it just makes it really simple. So if
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  Speaker 1: you guys are going to join them and going to
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  Speaker 1: make the switch, go ahead and use our referral code
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  Speaker 1: so that they know you guys came from us. And again,
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  Speaker 1: these are all very exciting things because just putting yourself
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  Speaker 1: on payroll, like developing your business in this way operationally,
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  Speaker 1: you become legit and that helps you run your business
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  Speaker 1: and just feel really good about running your business. Lastly,
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  Speaker 1: if you are listening in and you're not at that
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  Speaker 1: number yet and you're like, I'm not there, I still
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  Speaker 1: think that today's video should help you think about your
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  Speaker 1: businesses as you guys grow, Even if you're at twenty
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  Speaker 1: thousand a year or fifteen thousand, you're going to get there.
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  Speaker 1: You're going to get there. Eventually, you will get to
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  Speaker 1: that fifty thousand dollars net profit. It's gonna happen. Just
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  Speaker 1: keep putting in the work, putting in the time. Businesses
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  Speaker 1: are not built overnight. They take years, and for some
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  Speaker 1: of you, I hope this could be a really good
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  Speaker 1: goal for you of where you want to be in
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  Speaker 1: your business and where you want to grow. And again,
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  Speaker 1: if you ever need support in that piece in your growth,
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  Speaker 1: thinking about your business strategically and you want me involved,
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  Speaker 1: you can go ahead and get on a call with
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  Speaker 1: someone from our team. They'll share with you how I
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  Speaker 1: can jump in, how I can support you, how I
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  Speaker 1: can be a part of this. There's nothing more that
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  Speaker 1: I love than talking about business, especially with creators. So
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  Speaker 1: I'm here to support you guys every step of the way.
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  Speaker 1: So you can go ahead, get on a call with
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  Speaker 1: our success manager and we can share how we can
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  Speaker 1: support you. I hope you enjoyed today's episode. If you did,
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  Speaker 1: make sure to rate, review, and subscribe to our show
• 8:37
  Speaker 1: and visit Sidewalkerdaily dot com for more resources on all
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  Speaker 1: things influencer marketing and social media. Until next time,