Turning Your Drupal Hobby Into a Drupal Business (A Business Checklist)

>> Well, we'll see what happens. Let's go ahead and get started. Welcome everyone to the 11:15, 12:15 if you're in eastern time, session, turning your Drupal hobby into a Drupal business. As other sessions have noted, we do open up. I will remind everybody about our code of conduct. I have posted it in the chat box so that anybody can follow along with it. We're dedicated to a safe, inclusive, and welcoming environment. There's a link here to read the code of conduct. We are recording the session. We've actually already started it. I believe I've got it set up for Stacey, who is doing the captioning, so you should be able to see captioning. Let me double check that she's ‑‑ um... got it. I guess let me know if that's not coming up like it's supposed to be. Shoot. I have got her as a co‑host. Sorry. I think I've got it now. I'm particularly interested in what Doug and Michael are planning to go over today. So with that, I'm going to turn Mike and Doug loose, and we'll hold for questions until the end. As we go along, definitely post questions in the chat, and we'll relay them as we come to them. 

>> Awesome. Thanks. Turning us loose. That's dangerous. We appreciate it. Thanks, everyone. We're glad to be here. We will be presenting turning your Drupal hobby into a Drupal business. This is not an MBA course. It's a scratch the surface checklist style introduction to give you just some ‑‑ we don't know what we don't know information for those who are thinking of starting a business but feel intimidated by it. Or maybe growing into a more established business. Starting a business, we don't know what we don't know. There are all sorts of things we learn on the job. So that's kind of our goal is to give you insight into those things and give you encouragement that maybe it is a logical next step for you, and maybe it can be done successfully. So it's kind of part inspiration, part tactical, and we're going leave lots of time for questions on the end be I keeping it on the shorter side. So our presenters are, I will kick myself off first and Doug will share a bio on himself. I'm Michael Reynolds, I'm a financial advisor and a tech entrepreneur. I have 25 years of owning a digital marketing company, software company, various companies. Back in the day, I used to write code.  If I really had to in a pinch, I could probably write a few lines of PHP still. I launched my financial advisory practice about six years ago. I specialized in helping small business owners with their finances and helping them grow a business as well. 

>> Doug Vann here, owner of SynapticBlue. Michael and I have known each other since May of 2009. We were both presenting at the CMS expo, back in the good old days. Do a lot of Drupal training, consulting, developing. I have a small team, and we do a lot of fun work. Drupal has been a wild ride, as it has been for all of us. The most important thing on my slide is the karaoke addict. It's hard to spell it but fun to sing it. Nobody will be joining any of us anywhere to do any karaoke as we do every Midcamp. Sorry we're going to miss that. 

>> Michael: And yes, this is a deep blueprint behind me for any of you fans with me. I will kick off with the mindset here. Our goal is to talk to those who are obviously in the Drupal community, but who haven't quite made the leap into making it a full‑fledged business. Maybe you're working in a specific role somewhere. Maybe you're doing side work or freelancing here and there, maybe a mixture, maybe a hobbyist, and you're thinking what's next? Where do we go from here? We're talking to those who are thinking how do I grow this Drupal skill set and this community into a full‑fledged business that produces income, gives me more satisfaction, gives me a path to advancement. We want to talk about that. So again, maybe you've kind of been at it for a while and thinking what's next. We want to share with you the answer can be yes, you can do this. You can take it to the next level. I have been a business owner for 25 years and Doug has been a business owner for a long time. We have seen the good, bad, and ugly ‑‑ a lot of ugly. We will try to help people avoid some of the ugly. It is an up and down wild ride. We want to share some of the experiences and a few pointers along the way. 

>> This is a very reactionary session that we're doing here. The demand for Drupal is insane. A side gig is pretty much unavoidable. You can say no, but you're going to get asked if you're visible anywhere else. If you are going to be doing things on the side, we have ideas on how to do it much more intelligently. So why would you want to do this? Why would you want to go bigger? One idea is pretty simple. Make more money. Maybe you want to quit a day job that's okay, but you want to make more income. You would like to have less of a limit on your income. Maybe you want to work on bigger and more exciting projects. Doug and I were talking yesterday, prepping, what if you're working on a very segmented project and you're kind of just stuck in that one role and you would really like to work on bigger, grander in scope style projects and you get more variety in your work and do more with your Drupal skill? That might be good motivation. Controlling your schedule. That's a double‑edged sword. Doug made a joke. You have one boss now but if you start your own business, you get 20 bosses because your clients become your boss. But you do have control over your schedule if you run your own business. You can dictate your terms to some extent and have a lot more flexibility. A lot of people have excitement around building a brand, building a name, a business name, a brand, the personality of your business, your own website, your own logo, your own vibe out there to serve the community. And I think I mentioned before, make more money. That's not a bad thing to worry about. We often think we're serving and honing our craft. But you know, there's nothing wrong with wanting to simply make more money and have more satisfaction in your career. Those are a few things we think through and why we want to do this. And Doug may have some thoughts as well. 

>> You said it all. 

>> How do you business? That's why we're here. We don't know the exact make‑up in the crowd. Some of you may already run a business and looking for insights here and there. Some of you may have never started an LLC before and you want to know what to do next. I have talked to so many people that they're really good at their craft whether it's development or design or basket‑making or whatever it might be and they think I would love to do this on a grander scale, but how do I business? What are all the things I need to know? That's the challenge a lot of people face. So I'm going to first talk about entity structures. We could take eight hours and dig into just this. But when it comes to entity structure, a lot of people think where do I start? What should I do? Do I need an S‑corp or LLC or whatever? There are three general small business entity types. When you get beyond these three, nobody needs to be a C‑corp in our world. Sole proprietor is you're getting a business bank account and starting to take money, and that's it. It's really inexpensive. It costs almost nothing to set up. You need a separate bank account and a DBA, a business name you register, and you're set. There is no personal protection. If something, you know, unfortunately goes wrong and we hope it never happens, but if you are held liable for some error you make, then in theory, the client could come after your house and personal assets. That's really why other entities exist to add protection. 

 So the next entity is an LLC. It stands for limited liability company. In Indiana, it's $100 to file LLC, and it does offer liability protection. As long as you are operating it cleanly and separating business from personal very well, in theory, because the law is somewhat fluid, but in theory, you have protection for your personal assets. So if you ‑‑ if some error occurs or a team member makes an error and your business is sued, in theory, they are limited to going after the business assets and they can't come after your house. An S corporation is the next level. It's similar to an LLC, the tax treatment is a little bit better when you're making more money. So it's really hard to make a blanket statement, but if you're making more than 50 to $75,000 in income, then the Scorp starts to make more sense. The good news is it's easy to convert from an LLC to an Scorp when the time comes. In general, almost 100% of the time when I talk to people, the LLC is the best choice for them, because it's the cheapest, the easiest to set up, it's low maintenance from administrative standpoint and you can file a simple form with the IRS to be taxed as an Scorp and pay yourself through payroll. 

>> I agree. This is my story. If people are asking you to do Drupal work and you get a check, that's a sole prop. It's a hobby. It got bigger for me, and I wasn't taking care of quarterly taxes and I made some really bad choices and I'm still paying for those. And I got an accountant and got things taken care of and he took me straight to Scorp. Life is easier when you're not just muddying up your business and personal life and finances. Got to keep them separated. 

>> To file the LLC, it's pretty easy. Every state has an online process. You Google file an LLC in Indiana or in Wisconsin or wherever you are. And you will find a bunch of commercial sites. You will look at the state website like your dot gov. It will say click this button to file an LLC.  If you are a single owner, it's simple. Pay the fees and go for it. You can also use services like rocket lawyer. It works really well. You can also work with an attorney, but in most cases, that's probably overkill and more expensive than you need for something simple like that. 

 So the checklist, this is not comprehensive, but more of a bare bones how to get started. Step one, get your business name, your LLC, register with the state. Sign up for the LLC. Once you file the paperwork, it takes 24 to 48 hours to have your LLC formed, to get the e‑mail back. The next step is EIN. That stands for employer identification number. It's basically a social security number for a business. Like your social security number is a personal tax ID for you, the business has the EIN, the tax ID. This is free to get. I wouldn't bother paying anybody who is offering to do it for you. It's not worth it because it takes ten minutes online. You Google get an EIN online and you will find the IRS website, click a few buttons, they will ask for your LLC information and you will get an EIN back instantly and you will get a PDF that has your statement. File all of this stuff away in Google drive or wherever you store your company docs. But that's the process. It's free. And the EIN will let you open a business bank account. Then you will go to your whatever bank you're going to choose. We will talk about that in a minute. And you will set up a business account with your LLC and EIN. And it's important to have a separate business account. We want to have strict separation between business and personal money. So be sure you get that business account set up early on as well. 

 The next step is profit. Ride off into the sunset. Just kidding. Is that how it goes, Doug? 

>> Not quite. Not quite. 

>> We'll talk about some of that. And later on as you get bigger projects, liability insurance becomes important. I don't think you need it right away. But you want to get liability insurance to protect your business from anything that might go wrong or clients holding you liable. So that's kind of the bare bones structure checklist. So let's talk about some tools. Those who have never billed a client before, those who have never taken payment before as a company might be a little bit wondering what are the best tools for this stuff? I love PandaDoc for proposals and agreements. These are all really good tools for e signature. Especially in our brand‑new all virtual world, nobody wants to worry about e‑mailing a Word document, printing it out, sign it, scan it, e‑mail it back A that's too much friction. So when someone comes to you with a project, you are like let me send you my proposal, they will click and sign, and you're off to the races. I'm a big fan of quickbooks online. It is the standard in accounting. A bookkeeper will be able to drop in quickly and not have any learning curve. It's also pretty good. It is easy to use. It lets you invoice and lets you take payments via credit cards and ACH online. It lets you run your books and manage vendors and expenses. It is a simple all in one business finance tool. From an invoicing and cash flow payment standpoint to bookkeeping, it's pretty much the standard. Doug, you use freshbooks, right? 

>> I just transitioned from freshbooks to quickbooks. 

>> Another vote for quickbooks. Freshbooks is a decent alternative. Wave accounting is another and it's free. If you want to start with a free tool and upgrade later, wave might be a good option as well. 

>> If you take any one of those top three suggestions, you will be ahead of the curve. Forbes calls them ‑‑ they sent me a Word doc that I had to edit. If you want to be ahead of some of the top ten companies in the states, use one of those three. 

>> And project management. I highly recommend getting a project management tool in place. I love Asana. It is free for up to 15 users, which will cover you probably indefinitely. A lot of people start off with paper and then ten projects later, they wish they had a system. So start the system now is my advice. And with time tracking, I'm a big fan of harvest. I think I have converted Doug to harvest recently. It's great. When you're doing time and materials project, you start the clock, pick the client, do your work, stop the clock, pick categories. And when you're ready to invoice, you go into harvest, click reports, click on the invoice and push to quickbooks online. It's a nice very clean seamless process where you bill your time, click a few buttons, invoice your client. 

>> You want to ensure there is no misunderstanding. A statement of work is a first level of a contract. If you're not new and you have a million dollars, but if you are, if you need help, on your smaller projects, a simple statement of work will suffice to let someone know this is what we talked about and this is what we're doing and this is what it will cost. A statement of work has three varieties. I put links in the bottom of the slide. The PDF on our session page on the Camp site, those links are linkable as well. My example here is moving a WordPress site to Drupal or static html site to Drupal, they want pixel for pixel likeness. If they mention the current site doesn't have a slide show. Maybe they don't. That Reese all of our requirements. It's very detailed. That's a big spend in my mind. I have good luck on the lower end. Under 20K, a fixed bid is really nice. It has worked well for me. It gets ugly. People get confused. That kind of stuff happens. We will address that in a moment. So you don't know, they want something done and they want to secure you because you're a busy guy. And if if they don't sign something with you, you may not have the time for them. You never know when something is going to find you on LinkedIn and wow, you're busy. You get a bank of hours. I have a client that I will give 200 hours at a certain rate, and we'll use it up. And they will keep track of the hours. They will know. They will have visibility. I can't just run it up. I can't shock them two weeks later and say hey, we went through 200 hours a week. They want transparency there. And in that statement of work, you say this is 200. If you want ‑‑ if you want ‑‑ more, three more hours, it will be a higher rate. And if you don't use these in six months, they're gone. So details like that. 

 Here is what I don't care for a bunch. The performance‑based statement of work. I still run into it, but it gets challenging. Site audits. The developer that we hired, did they do it right? They want executive summary that spells out lots of things. And also training and consulting. Fly me in and for two or three days, I will be on site with them working with their team. They lost the vendor. 

 I had vague expressions of what you're doing. But honestly, it would take you 48 hours to discover what they really, really want. You just got to show up and be the professional and do what you can. And we don't have an answer to a question, then you got to Google it. I wasn't expecting that question, so I had to Google it. 

 What happens when requirements change? And it does happen. You be the judge. I have got clients, I give them more than I should. They're my favorite clients. And other times I'm a bit more of a stickler. If things get crazy, we say hey, would you like me to cancel the current statement of work. I will send a draft of the new one. And the new one the copy of the old with another line in it or taking something out. You don't want to spend eight hours managing the agreement. This statement of work, nullify it. Maybe it's a good thing. Maybe you're praying for change because every time you change you're making more money. You will learn a lot more. 

>> All right. Money and taxes. This trips people up, so I want to talk about it early on before you start the business and make money and get clients. So I want to talk about separation between business and personal. If you have a business and you're mixing money,then having an LLC will not help you. Keep that in mind. Make sure you only pay for business expenses out of your business account and receive money from your business account. The only time money transfers is when you pay yourself. I like Azlo quite a bit. I think it's a great bank account for small businesses and freelancers. So I use Azlo personally for one of my businesses. It's very high‑tech, great mobile app. You can do ACH transactions for free. You can invoice out of it if you want to. It's got a lot of nice tools. Check out Azlo.com if you want to look at it. When you're paying yourself, the only time money goes between the accounts is when you're paying yourself, your compensation or salary. So as an LLC, you pay yourself just by transferring money through ACH, which is electronic payment or just writing yourself a check, which you can't do through Azlo. Transfer the money. It's called a distribution or a draw. And that is basically how you pay yourself. It's beyond the scope of this presentation to explain how to pay yourself like in terms of percentages or rates or whatever. Keep in mind that you will track your money coming in and going out. Whatever is left over is your profit. As you get work, you pay yourself a portion of that. Maybe half of it, 60% of it, whatever you're comfortable with. That's a different discussion, but that's how you pay yourself. If you're an Scorp, you have to pay yourself through payroll. If you get to that point, you need to set up a payroll system. My favorite is Gusto. If you get to that point, I will help you. 

 I see a lot of people in general, but also tech people taking payments through non‑mainstream methods like papal and Venmo and stuff. Lots of businesses do this because it's convenient. I'm not saying there's anything wrong with it, because they do have business accounts, but it complicates things and it can make things messy. So my advice is to keep things clean. Take payment through regular credit cards and ACH. Send in payments through quickbooks and let people pay online. Keeps it cleaner and it will probably lower your bookkeeping costs as well. 

 Taxes. I want to stress this and Doug wants to stress this also. We both want to stress this. Okay? So as you set up your business, an LLC or Scorp, these are all what are called pass‑through entities. Your business does not pay any taxes. You pay the taxes. Any income that comes into your business counts as your personal income because you as the owner are the taxable entity. That is why they are pass‑throughs because the tax liability passes to you. What that means is you have to not only file your income taxes the 15th of April every year, but you also have to pay quarterly ‑‑ estimated taxes. Let's say you have a regular W2 job. You go to a company or sign on to Zoom for work. You do your work. You get your paycheck every two weeks. You get a paycheck, it's W2. They are taking out taxes for you. They are taking out the withholdings and payroll taxes. They are doing all after that for you. If you set up your form appropriately, then you're going to come out okay. You will have a refund or maybe owe a little bit or break even. You will be somewhere around that range unless you dramatically under anticipated your withholdings. So that's how you see things through payroll, which means that you're probably used to not worrying about taxes. It happens magically through payroll. As a business owner, you are now responsible for that. Whatever income you make as a business, whether you draw a check on it or not, the money that stays in the business and the money that goes to you, it's all added together to be the same income. That's what you're taxed on. 

 So you want to be aware of that first, so if you get a payment for $10,000 for a project, and your expenses from that project are $2,000 and you're making a profit of $8,000 on that chunk of income, you are taxed on $8,000. It's not being withheld automatically. It's something you're responsible for. That means you want to report quarterly estimate tax payments ‑‑ quarterly estimate tax payments. This year because of the coronavirus, it's July 15. Normally it's January 15, April 15, June 15, September 15 are the four times throughout the year you pay your quarterly estimated payments. So typically you want to work with an accountant to calculate the right amount, but you can also do some napkin math by just watching your income and maybe take 25 to 30% of it and pay that ‑‑ pay the whole amount to yourself. But when you pay yourself, also transfer a portion of that into a separate account for taxes. And then that's what you will pay your taxes out of on a quarterly basis. I recommend doing it that way because it's all too easy to say I'm going to leave it in the same account and pay my taxes when the time comes because somehow the money walks away because it's in the same account. I do recommend setting up a separate personal account for taxes. Pay some money into it monthly to build up that fund and pay your taxes from that account. You are paying it from a personal account. The business does not pay taxes. You personally pay the taxes. Doug, do you want to jump in on anything? 

>> Yes. I have a somber message. 

>> A tale of whoa. 

>> Startin 2011. Business owner's log. A sweet, sweet gig in the state of Ohio. My next‑door neighbor. I did a little work and they said hey, we need a lot of your work. Boom, I had a furnished apartment just off campus for OSU. It was fantastic. I won't brag the numbers. I didn't give one ounce or penny of consideration. I don't know what I was thinking. It's not like taxes disappeared from reality. Wow. I have no excuse. But I am still paying for that. So don't do that. And something else, I just saw it yesterday on Twitter, somebody complaining that these airlines ‑‑ this is related ‑‑ these airlines were making bank for so long, very profitable for quite a long time. They recovered from the recession with gusto. Now they're having trouble and they have no liquid cash, no reserves, asking for bailouts and everything else. So you as a small business, you need to have some reserves. But you've got monthly expenses. If you want the paid version of some of these tools that you're using to manage your business, you don't want to have no money in the bank in two months and you can't afford to pay. You need to put personal money in there. I'm happy to say that my business finally has a bit of a reserve, a good reserve. It can sustain itself in this economy. The virus has not affected my business, but if it did, I would be able to continue paying myself some payroll for a while. I didn't spend it all like the airlines did. The money is coming in, when you bid $10,000 on that project, you're not bidding 10,000 on that project. You will get to keep a portion on that project. If you want 10K, bid 14. 

>> Good advice. All right. So we will wrap up with a couple things. So retirement vehicles. A lot of people if they have left a corporate job and they think I'm going to lose my 401(k), there are actually quite a few vehicles that I like for saving for retirement and investing in general. You probably know about the traditional IRA and Roth IRA. They are individual accounts. You can start making use of those as an article terntive if you are leaving a W2 environment with a 401(k) and launching something on your own. There's also a SEP IRA. It is a retirement vehicle that is pre‑tax, and it is like an IRA on steroids. This year you can put in $57,000 per year into a SEP pretax. It's like a 401(k), but it's really similar ‑‑ simple to set up. There is also a solo 401(k). A single owner business can have a 401(k) plan. It is fairly simple to set up. I set a lot of these up for clients all the time. And it's got both a traditional and a Roth option. Traditional means you are putting your retirement money in pre‑tax. It grows tax‑deferred. And when you withdraw on retirement, you pay taxes on it. You get a tax deduction going in. Roth means you put in money that has already been taxed and it grows tax deferred and tax‑free so when you withdraw money at retirement, you are not taxed on any of it. For most people, I really prefer Roth, especially high earners. But high earners run into ceilings where if you make too much money you can't contribute directly to a Roth IRA. So a solo 401(k) lets you mix them both and there's no income limit. You can make as much money as you want to and you are qualified to contribute to a solo 401(k). If you are a high earning solo business owner like a lot of developers are, that's a good vehicle for those individuals. 

 And finally a taxable brokerage account. This is a non‑tax sheltered account. It's sitting out there with no tax treatment. So a lot of people supplement their retirement plans with a taxable brokerage account for another layer of saving. I do that personally. I do that personally. Don't think you will lose your retirement plan. You can roll it over and save a lot of money with tax advantages as a solo business owner. 

>> All right. This is a slide‑ument. I realized when discussing with Michael this is my life story in front of your eyes. These are the things I did. I didn't do any paper clicks or traditional. I'm sure there's another session where they can tell you the standard common things to do. But literally, just being part of the community and having a website that says I do these things and then networking locally and afar. And not everybody can afford it. I went to 12 Drupal camps in 2010, but I had companies paying me to go because they wanted me to be at that company, the company was sponsoring the camp and they wanted to have a beginner's class for half a day or a full day. So I was able to develop value out of that for them and they took care of me. So it gave me a lot of visibility. A lot of my growth is word of mouth. These are marketing techniques that I believe everybody can pick up. I know a lot of you that I have seen are doing this, because I see you in these places. On the right side, being giving with your time and money.  I will spend a little bit of time there. Go to the dot net meet‑up or the Python meet‑up or the Amazon cloud meet‑ups and just be a fly on the wall and you will meet people. If you come back a couple times, offer to get the pizza next time. If there's not a sponsor or whatever is going on, offer to do something of value to be thanked and to be visible. Established areas. When you are known as the Drupal person and someone else knows you, when I ask somebody how they got ahold of me, they're a friend of someone who knew me. I got a project from a lady who worked in the CBS studios in New York City. Her producer saw me give a session at the UN when the New York City Drupal camp was being held at the UN as it always is. It was a friend of a friend, and I got a sweet gig out of that. Be visible. Be giving. Present. Do what you can. The only thing you don't see on this list is podcasting. I know Michael is using podcasting in his business for elevation financial. That is one thing I haven't done. 

>> I'm a big fan of podcasting. I think it's the secret weapon nowadays because it's so intimate and you can show your personality through podcasting. It's easy to consume when you're running or biking or folding laundry or driving or whatever. 

>> I made this bold and I forgot to point it out specifically, but proudly show your Drupal association member badge. We use free software and free tools and you wake up in the morning and somebody in approximate Europe made the tool better, faster, more secure, we wake up every day with more tools than we went to bed with. And the Drupal association is not involved in all of that, but a lot of it. They keep Drupal.org up and running. Our tools are open‑sourced. Please give back. Whether you're killing it or not yet, it's an affordable thing to do. Please join the Drupal association. 

>> Nice. All right. So we wanted to leave plenty of time for questions. I think we did. Timing looks good. We got about 20 minutes. Before we get to that, we have a landing page set up with links to the resources. Go to elevationfinancial.com/Drupal. If you want to hit us both, e‑mail us both and we will definitely get back to you. There's a lot of stuff we talked about that was very scratch the surface due to time. If you want details like I'm stuck on registering my EIN or I'm stuck on this or what do you think about this or I don't know what you mean by this, e‑mail us and we would be happy to walk you through the details on where you're stuck. 

 All right. Let's take your questions. 

>> There is a comment to share. If you are a sole propriier the and you do not have employees, you can ask AARP tax aid far assistance. They will also help you set up quarterly estimated taxes. This is free. There is no age or income requirement. 

>> Did not know that. 

>> Yeah. They will not help you if you are an Scorp or LLC or if you have to send anyone a 1099. 

>> Good to know. Did not know that. Michael told me about this. Someone else already knew this. He said you can make both employer and employee contributions. It reduces your self‑employment tax. Michael, explain? 

>> Yeah. It's a business. It's a write‑off. People like to say write‑off, which means deduction of your income. You are kind of paying yourself with tax‑free money. Because you're contributing money into your 401(k) from your business, which reduces the taxable income, but it's money going to you. 

>> This is pertinent. I don't think I said this explicitly, but Michael as well as my friend for 11 years is my financial advisor as well. We just finished hooking up my 401(k) recently, the solo. We went Roth, right? We're paying post tax? 

>> You can do both. If your goal is to lower your taxable income, you put into pretax. If your goal is to have Roth tax‑free growth, do both. If you want both, max out the entire thing for $57,000. 

>> I have the Roth option, so I pay myself with payroll like a good boy. And I take my money out of my personal account and put it into the Roth. In order to have the employer contribution, that couldn't be a Roth, could it? 

>> Correct. Employer contributions can never be Roth. 

>> Okay. For a second, I thought I was going to do some free tax into a Roth. I'm always trying to work the system. 

>> If you find that loophole, let me know. 

>> The government always finds a way to get their money. They have their own interest in mind. The solo 401(k) care where the money came from? A side gig that is an LLC that doesn't make much? 

>> It has to be from your business. It does care. Yes. 

>> So you can't take your employment wages and then start putting it there? 

>> Nope. So if you're doing a non‑Roth, yeah. 

>> 25% of your income is the limit. 

>> Unless you are 62, then it jumps up a little. Right? 

>> No. It's just a general rule. I could be wrong. I think it's a general rule across the board. It's your age limit is 50 and over, you can contribute more. You can contribute up to $25,000 over age 50 into the Roth. 

>> I'm not 50. And by the way, congress has, over the years, both administrations have created the very special vehicles just for small businesses. So these are things that weren't around. Michael probably remembers when they were and when they were not. These laws are changing and they are making new vehicles. Take advantage of it. 

 And also for sole propriier the, you should pay health insurance and take it off your schedule C. I just talked to my accountant about this and they said no. Michael? 

>> That's a good question. I don't know the answer to that specifically. I have heard that you cannot do that. Your accountant said no, right? 

>> Just two weeks ago. 

>> Yeah. I have heard talk of people wanting to do that. But I don't think it's allowed. 

>> It sounds wrong to me. And I like what Len is saying more than my accountant. I will tell the government that Len told me this is fine. A sole propriier the, you should pay from the health insurance because you reduced income off the top. Health insurance for spouse and kids does not work. He says does not work for LLC or SCorp. 

>> I may be wrong. That may be true. I don't know about that. 

>> And I misspoke earlier. Tyler says is there any reason to forego sole proprietorship? I'll jump on that one. When you do nothing but just take checks from people, you're a sole prop. And the money is a bit muddy. If if something goes foul, that state of Ohio gig was big. I was so happy to have it. But had the state of Ohio come after me for some mismanaged thing that I messed up, everything was in my name. My house, everything. That separation is truly essential. 

>> Protection is important. So if you're a sole proprietor, if you're a dog walker, a sole proprietor, okay. Fine. I can't think of many reasons why you would get sued as a dog walker. As a Drupal developer, you could introduce a bug in your code or there is some error. No matter whose fault it is, the client could try to sue you. You want the liability protection there. 

>> Our protection, if you're cutting grass in the neighborhood and you're in high school, sole prop, clearly. If you're going to try to be legit, leave the sole prop as soon as you can. If it's not really a hobby any more. And really you should run your hobby through an LLC. I think 0 to 50 or 60K, stick with LLC. 

>> To me it's not about income but about liability. If you're doing business that could hold you liable for something or you could potentially get sued. Think about it. What is the likelihood of me getting sued for something? Cutting grass or dog walker? A surgeon? Physician? Pretty high. I would say developers are in the middle. When you're writing software, especially for bigger companies, the more mission critical your work is. The more you have a chance of if something goes wrong, that client may come after you. I think it will be different for everybody, but I would look at what is the likelihood of you getting sued for something. 

>> Good call. Chris chimed in again. His understanding is the health insurance premiums must be deducted on your 1040 as a deduction for AGI. Do you carry errors and omissions insurance? 

>> Yes, E and O insurance is a good thing. 

>> Is that different from general liability? 

>> It's basically the same package. 

>> I thought it was. And T funk says thanks. 

>> Thanks. Glad you're here. Any other questions rolling in? 

>> I will take advantage of the ‑‑ T funk is back. Do you get better health insurance options as an LLC than just a person looking for coverage? 

>> No. I have not found any. If you get to a certain size business, you can kind of jump on to bigger company health plans. I have a business that runs through Gusto payroll. It's got 60 employees. But if you have up to five, you can start to get real health insurance as a group plan. But beyond that, lower than that, it's tough to find inexpensive health insurance options. There's a company called ‑‑ Doug, do you know about this? Kemper like a light‑weight health insurance plan. Obviously there are the state exchanges and christian ministry style plans. I haven't found many options better than those. If you go direct, it's going to be pretty expensive and they may not even take you. That's an area where there's a lot of gaps is health insurance. 

>> You get no clout being an LLC or subS. You're just a bloke. You're a potential liability to them so they want a bunch of money from you. 

>> Yeah. 

>> I knew there were people like this little side thing is making money. I don't want to get in trouble, what do I do? 

>> We also do not want you to get in trouble with the government. 

>> We want you back at the next camp, not behind bars. You will not get the same ride that dog got. That's my shout‑out. So T funk speaks again. What I'm getting at is I was a contractor for a while and had a hard time finding good coverage for my fam. Yeah. I'm transitioning back into insurance. My wife has insurance and her company goes through Indiana chamber of commerce. 

>> Good to know. 

>> You got to be creative. Kemper is a great thing. Look it up, and ‑‑ today you don't sit down with them. 

>> Virtual coffee. 

>> Have some virtual coffee. I got free coffee out of my meeting. You won't get that. Listen to it. It is, it's disaster mitigation. It's not going to help you with co‑pays and whatnot. It's a quote, unquote, affordable way of getting that done. 

>> All right. Any other questions here? Tim says LOL, absolutely. 

>> Yeah. 

>> I want to embarrass Michael Reynolds for a moment. 

>> Huh‑oh. 

>> 11 years and counting, my financial planning. The previous slide had the elevation financial web address with slash Drupal to look at the links we had today. The business structure, just three or four weeks ago, he had an entire podcast episode about business structures. Are the original five or ten still there? Having multiple bank accounts, there's a crazy episode like number two or three about having so many bank accounts. And for us, one for business and for us, one for taxes if you're doing LLC. And he goes on this parade of four or five or six accounts that he has. And he's not moving money around trying to break the law. Went to Disney world a few months ago, and he had a fixed amount and did the whole trip and kept under budget. Had one debit card tied to the vacation bank account. He would ‑‑ did you even bring a different card with you? 

>> Yeah. I like money life hacks. I think a lot of personal finance is about behavior. People look at math but leave out the behavior part. I like the life hacks that help you train your behavior to be a better money manager. 

>> You know how badly I ran my business. You can assume I was running my personal finances about the same par, maybe worse. I have been blessed to have Michael Reynolds helping me out. I recommend checking him out. The podcasts are fantastic as well. Also I want to highlight the business channel, I did plug our session in there and Michael and I will try to keep presence in there if we see activity going on. 

>> I will watch in the business channel. If you have follow‑up questions later, over the weekend, we will monitor that. 

>> And I'm going to look into this, my business trying to pay for some of the retirement and insurance stuff. I think I've got that settled, but I will gladly look into that again. You can expect me, if not both of us to pop some links in there. 

 A banana? 

>> Yeah, I saw that. 

>> David said you need a budget. Look at that. 

>> I have been a YNAB fan for years. I love it. I try to get all of my clients on YNAB. 

>> My stupid financial planner is beating me up over YNAB. If he was kind he would give me a C+, maybe a D‑. 

>> Yes. It is fantastic. Definitely sign up for YNAB. Tyler, I see it. Tyler said having a hard time sticking to it. If you want help, reach out. I would be happy to give you guidance or cheer leading on it. 

>> Step one is use the frickin' phone app. 

>> Yes. The phone app is helpful. 

>> So Len has a link for chapter 6. Health insurance is not my area of expertise, so I'm happy to learn anything I can about this.

>> I agree. My business should be able to give me that benefit and it comes off the corporate. You know? It's deducted. That's exactly the way it should be. 

>> This is a long page. 

>> Yeah. We will review that later and offer comments. 

>> Thank you for posting that. 

>> Thank you very much for that, Len. 

>> All right. We have got about five more minutes. Are we good? Or any more questions rolling in? I don't see any.

Roy, do you want to wrap up? 

>> Looks like we have reached a pause point.  Thank you for taking the time to outline this for us. This was very good information. 

>> Thank you. 

>> And like I said, go to the link. They will have the resource information to check out later. Please remember to give feedback on the session. I posted a link for that in the chat. But it's also just go to the session page on the Midcamp site and obviously hop over to the Slack channel for additional questions and feedback. 

>> Wonderful. Thank you, everybody. Glad you were here. Thank you so much. 

>> Thank you all. 

>> Reach out with questions. We're happy to help. 

>> Enjoy the camp. 

>> Enjoy, everybody. 

>> Take care!