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Tax Year 2010: Time To Pay The Tax Man…

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Last night I spent about four hours putting together my tax forms for 2010. I use the Deluxe version of H&R Block at Home (which, by the way, I downloaded this year instead of buying the disc – no complaints from me about the downloading process). And even after using H&R Block’s software, spending those four hours pouring over different tax forms, and giving my taxes an incredible number of reviews it appears that 2010 is the first year since I’ve been filing returns where I’m actually going to have to make a tax payment. Well, I’ll have to make two payments – one to the State of New Jersey and one to the Internal Revenue Service.

Alright, so WWE alumnus Irwin R. Schyster isn't actually getting my money, but you get the point!

According to the tax software, I owe the great State of New Jersey $525 while I owe the IRS some $3,686. In total, I owe $4,211 in additional taxes for last year. Sure, I have a few more reviews to make on the various tax forms (my taxes are really complicated – see the next paragraph), but I don’t think that these numbers are changing too much.

The reason why my taxes are increasingly complicated is because of all of the stuff that I “do.” In fact, if you’ve been reading this blog for a while then you know that I bitch every once in a while about being too busy. Well, that hectic schedule carries over a similar craziness when it comes time to do my taxes. You see, I get some W-2 forms (my day job and teaching at the local college), a bunch of 1099-MISC forms (teaching at the online college, a few for certain types of income earned from Usable Web Solutions, etc), a 1098-T form for the classes that I was able to take for free last year at the local college, two different student loan interest deduction forms (one from the USDOE and one from NJHESAA), a Schedule C for my website company, a Schedule C for the other small business that I started for the online teaching and grant writing, a 1099-B for proceeds from stock sales, etc, etc. It gets ridiculous after a while.

If I didn’t have such a good handle on all of this stuff (I think), then I’d seriously consider getting myself an accountant to do this work for me. But I think I have a good grasp on what’s going on with my funds, so I’m confident in this return. But to get back to the point…

I already pay my taxes. Just like the rest of the working world, my company deducts my tax obligation through my paycheck and – just like the rest of the working world – I get sick at how much money gets taken out of my paycheck for taxes each pay period. However, I’m fine with paying an additional $4,211 in taxes for last year. Why? It’s simple, really.

I made a good amount of money last year.

Look, folks – I’m not writing this entry to brag or toot my own horn or anything because I’m not bringing in the big bucks by any means. However, think about what you’ve read on this blog for the last year or two: I work at a day job, I’m an Adjunct Professor at the local college, I’m an online instructor at a very well-known online college, I’ve owned a successful and profitable small business for 5 years, and I contract for some low-level consulting and grant writing jobs for local nonprofit organizations. I work like a madman! And, obviously, one of the end results of that type of work schedule should be an increase in a guy’s annual income and, thankfully, that’s how it worked out for me last year.

I WANT To Pay These Taxes
But the reason why I wanted to share the fact that I’m paying a lot of taxes for last year’s income is because I want to pay these taxes. That’s right – I want this additional tax liability which is over and above the taxes that I already paid last year. Why do I want this increased liability? Because when you pay more in taxes, it means that you’re making more money and everyone should want to increase their annual income. Of course, most folks won’t have a convoluted tax return like I have where certain revenue streams deduct federal income taxes and others don’t, but just remember the lesson here: the more money you make, the more money you’re going to owe.

It’s okay to owe a few tax dollars at the end of the year – it means that your income is going in the right direction. Good luck on your tax returns this year, everyone!

Some Lessons and Decisions After Five Years of Owning Usable Web Solutions, LLC

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Five years ago today, I started Usable Web Solutions, LLC with the intention for it to be a boutique web design firm that specialized in creating websites for local nonprofit organizations and start-up businesses in the Monmouth County area. And – five years later – I’ve only partially met that intention, but that’s not entirely a bad thing.

Happy Five Year Anniversary!

Like any businessman setting out on a new venture, I spent a good amount of time researching the competition prior to even opening Usable Web Solutions, LLC. Through my research I found that most of the local web design shops were charging outrageous rates for a substandard product and substandard performance. In terms of generating income for the new company, my intention was to price my services such that they undercut the local competition by 15% – 35%. The idea was that by undercutting the local competition by this type of margin, I wouldn’t sway any existing websites to switch to my services, but I would become the service provider of first choice for new websites.

And, honestly, that strategy pretty much worked.

However, what I learned as I went along was that my original intention of focusing on websites for start-up businesses was a losing proposition. The truth is that many local start-up businesses do not (and will not) generate any revenue from their website. And as we saw over the last few years with the tough economy, when times are tough companies begin to cut costs. So, if you’re a small business owner and you have to decide what gets cut in your budget – do you opt for cutting your website services or for cutting your salary?

I think we all know how that usually ends up…

Over the last few years, I’ve had a surprisingly large number of clients simply stop paying me for contracted services (i.e. deadbeats). In fact, altogether I’ve had 36 contracted clients since I opened up Usable Web Solutions, LLC. Actually, that’s not a bad amount of clients to sign up over a five year period considering that this website company is my side gig after my day job, teaching at the local university, and teaching at the online college. But to get back to the deadbeat clients – of the 36 contracts I signed in the last five years, 12 of my clients turned out to be deadbeats.

It’s an astonishing number when you think about it. A full third of my clients either just stopped paying, were horrible clients and screwed me out of contracted revenue, or just randomly disappeared. It’s outrageous. But, like I said above, I learned as I went along and what I learned was interesting on its face, but not totally surprising.

When I was working with outside clients, the chances of me getting screwed over were 1 in 2. However, when I was working with websites that I had a direct stake in, the chances of me getting screwed over were 0%. Some of you may ask, “what does it mean that you had a direct stake in the website?” Good question. As it turns out, of the 36 contracts that I signed over the last five years, 10 of them were with myself! That’s right – my best client looks at me in the mirror every morning.

Websites that fall within the boundaries of me having a stake in them include the one that you’re reading right now – JerseySmarts.com. In addition, I own 3 professional wrestling websites, 2 fraternity websites, 2 websites that are nothing more than domains right now, the actual Usable Web Solutions, LLC website, and a photo hosting website for my Mother’s eBay sales. Over the course of the last five years I’ve actually owned more than these 10 websites, but I’ve been shedding the websites that don’t turn a profit.

About two years ago, it became glaringly apparent that the majority of Usable Web Solution, LLC’s revenue was earned via advertising on the websites that I had a direct stake in. Further, it became apparent that with at least half of my outside clients screwing me over, chances were that I was wasting my time with them. So I began doing what any good businessman would do – I began shedding the outside clients and increasing my investment in the revenue generating websites.

From my perspective, this change in strategy from focusing on local nonprofits and start-up businesses to focusing on websites that I have a direct stake in paid off. For example, in its first three years of operations, Usable Web Solutions, LLC was losing money each year. Sure, it wasn’t losing huge sums of money, but it was losing money nonetheless. However, in the last two years the company has lost much less money. Now, some folks will read that and say that it’s still losing money and that’s true. But there’s no comparison between losing, say, $1,000 during one of the first three years of operations and losing, say, $20 during one of the last two years of operations.

Besides, the truth is that these losses are simply based on income versus expenses. Anyone who works in accounting could look at my books and know that, in terms of real dollars, Usable Web Solutions, LLC has been generating revenue since I started shedding the deadbeats. It’s been great, actually.

And that’s about as succinct a wrap up that I can provide after five years as a small business owner! I suspect that during the next five years I’ll continue this trend of shedding third party clients (I still have some) and focusing more on the websites that I have a direct stake in because – at the end of the day – it makes smart business sense.

Once Again, I’m Exhausted From My Week-Long “Vacation”

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The last week might be the third or fourth time in the last eighteen or so months that I’ve taken off at least a week’s worth of time from my day job. And you know what? Once again I find myself at the end of this “vacation” and I’m absolutely exhausted. You see, I haven’t actually spent my vacations in a vacating mode. Instead, I’ve either been traveling to different cities to fulfill my volunteer obligations as a member of my fraternity’s foundation Board of Trustees or spending time at my home office in New Jersey working on my website company, focusing on the classes that I’m teaching, or working on the public relations certificate program that I’m enrolled in right now.

After spending a few vacations in a row doing this type of stuff, it begins to completely wear a person out.

But I’m not complaining. Nope. Instead, I’m glad because – just like with my student loans – I can now begin to see some light at the end of this tunnel of constantly working around the clock. What does that mean? Well, let me explain!

I’ve chronicled on this blog many times in the past few months that I’ve been getting rid of some website clients for a variety of reasons. The primary reason that I’m spinning clients off is due to the misunderstanding that many of my [former] clients had about what my duties were as a webmaster (i.e. I’m not the guy to call when your computer has a virus) as well as my rates being so low that I wasn’t turning a large enough profit to keep these clients in my portfolio. Was I turning a profit with these clients? More or less. But it certainly wasn’t akin to what my time is worth in the market. So by clearing out some of these clients, I’m going to open up some more free time in my schedule.

On top of that, I began this public relations certificate program at the local college last year. Why did I start the program, you ask? Well, I hate loose ends and I attended this college as a graduate student for one semester before leaving to go to Rutgers University to pursue a different Masters Degree. In the mean time, during that one semester at the local college I completed one course for three credits. Technically, I’ve had those three credits outstanding and just hanging around at the local college for seven years – and that has always annoyed me. To remedy that annoyance, I started a certificate program during the fall semester of 2009. The program calls for 12 credits in order to receive the certificate and I now have (including those three credits from 2003) nine credits completed in the program. I’m currently taking an independent study (in an awesome topic, by the way) that will be completed by December 15th of this year. Once the independent study is completed and [successfully] graded, I will be a certified public relations specialist. And I won’t have those three credits hanging around or have to worry about studying and researching like a graduate student any more, either. More free time and a free public relations specialist certificate? Works for me!

My other big commitment that will be alleviated before Christmas is my face-to-face teaching obligations at the local college. Currently, I’m teaching one face-to-face course twice each week in the morning. This is the first time that I’m teaching in the morning and it definitely has been challenging on my personal and professional schedules. Once this class ends, though, I’m not scheduled to teach another face-to-face class until next September. In other words, my time commitment at a college campus that is about 15 – 20 minutes from my home will dramatically decrease until next fall. Not bad!

As for the online teaching gig, all of the courses that I’m currently mentoring will be over in the middle of December. To date, I haven’t been scheduled to teach any new classes in December or January, but that’s okay. There is an ebb and a flow to the demand for the niche courses that I teach for this online university and I expect that the demand will pick up again in the early spring. Although you never know with this online college – sometimes they assign a course out of the blue. However, right now it looks like that obligation on my time will be easing up in the middle of December.

Thinking a little bit longer term, some of you may know that while I serve as the Treasurer of the fraternity Foundation, I am also leading our strategic planning process. We are scheduled to complete that process by the first weekend of February 2011. Once that process is complete, a great deal of my time that I spend in my mini-home office will be opened up again for me to spend on my personal interests or… nothing at all!

So when you read entries like this on JerseySmarts.com, don’t think that I’m bitching. In fact, I lay out these types of entries because this is still a personal blog and it helps me to organize my thoughts a little bit. So thanks for reading through my thought organization process!

Many Projects Due – Grading, Financial Planning, Professional Development, & More

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One of the things that I hate doing here at JerseySmarts.com is posting random entries. However, as you may have noticed October was a choppy month for consistent updates on the blog. There are some good reasons for this – most of which you’ll read about right here on the blog in the coming days and weeks. For example, I had one hell of an experience getting my Honda Civic fixed at the local dealership’s repair shop. The experience was so completely out of control, that I began writing about it last week and I’ve crafted an entry that is, I think, pretty damn entertaining. You should look for that entry coming at some point this week.

In addition, I’ve been reading through some of the books that are taking up space on my bookshelf and, obviously, you should look for a few book reviews coming in the next few days/weeks. And hey, at least one of these reviews is for a book sent to me from a professional wrestler’s publishing company so I could offer some commentary on the piece. Pretty cool, huh? Here are some other things that I’m working on that may not receive their own entry on JerseySmarts.com:

  • Sigma Pi Educational Foundation: I make no secret out of the fact that I donate my time, talent, and whatever treasure I can scrounge up to the Sigma Pi Educational Foundation. With respect to that “talent” portion of my contributions, since August I’ve been heading up the Foundation’s strategic plan study group. This duty has allowed me to work closely with some of my fellow Trustees as well as some volunteers – all of whom are looking for a better, stronger way forward for the Foundation and Fraternity alike. Earlier this week we held the last focus group conference call which capped a two and a half week period of these types of calls – many of which I was on for over an hour. I’ve compiled a preliminary, raw data report and sent it out for the study group’s review. Later this week we’re going to have another conference call and then I’m going to spend some time compiling a final report to the entire Board of Trustees. However, the work isn’t over yet. In a few weeks I’ll be heading to Nashville, Tennessee to present our research findings and then to lead the larger strategic planning process with the entire Board of Trustees. This process will be capped off during the December/January time frame and then, finally, I can take a breather on this stuff! By the way, click here if you want to make a small, 100% tax-deductible donation to support the Foundation’s scholarships.
  • Preparing for a Family Night: Over the last few weeks, I worked with my brothers and future sister-in-law to plan for a family night and dinner for my Mother’s recent birthday. We had the family night and dinner last night and it was a lot of fun, I think. In fact, one of the best things to come out of last night was a family discussion about reducing our excess spending on Christmas this year because, frankly, we’re all working towards specific financial goals that require a dedicated planning effort on our parts. It was a great conversation and a great conclusion, I think. Plus, spending the night with the family for dinner to celebrate my Mother’s birthday was a great time!
  • Financial Planning Roadblock, Courtesy of NJHESAA: I’m not sure yet, but I might spin this little blip off into its own entry to mimic an entry that I wrote both one month ago and many months ago. The long and short of it is that I sent a $1,000 payment to NJHESAA on Monday, October 18th. The check was finally posted to my account on Thursday, October 28th. But that’s not what has me completely frustrated and aggravated with this anti-customer service organization. What bothers me is that I sent a $4,300 check to NJHESAA on Tuesday, October 19th and here we are on Saturday, October 30th and the check hasn’t been posted to my account yet. What the Hell is NJHESAA waiting for to post my damn check?! This isn’t hard, NJHESAA – I know you have the check now post the damn thing to my account for goodness’ sake. I can’t wait to be done with this miserable, horrible organization. NJHESAA could learn a thing or two from the United States Department of Education about customer service and making the student loan repayment process easier for the borrower. Because, at this point, NJHESAA’s payment processing system is borderline ineffective which tells me that there has to be some incompetent people working there. What else could bring on a nearly two week delay?!
  • Financial Projections and Forecasting Stunted: As you might imagine, because of NJHESAA’s inability to process a check with any semblance of efficiency, my financial projections and forecasting has been stunted for the last few weeks. For a guy who checks each of his accounts both in the morning and at night (and sometimes in the middle of the day), waiting for these bozos to post this check is torture. I’ve been adjusting my projection models by $4,300 every time that I go in there and make a move. It’s annoying. I have a lot of financial goals that I expect myself to achieve in the coming weeks, months, and years and with my ability to precisely project when my dollars will be posted to various accounts, it makes planning for the immediate future very difficult.
  • Bizarre Indian Summer: I’m not going to spin this out into its own entry because it’s short, but if you live in New Jersey then you know that we had this weird Indian summer hit us in the last week or so. Before the mini-heat wave hit, I went out and purchased a radiator for my bedroom and it’s awesome! It actually warms up the entire second floor of the townhouse – can’t complain about that at all!
  • Beginning to Complete Coursework: Some of you may remember that I’m actually enrolled in an independent study course at the local college where I teach. Successfully completing this independent study will give me a Public Relations Specialist certificate. Not too bad, huh? I’ve read through the material for the course and, once the final strategic plan report is completed for the Foundation (see above), I’m going to aggressively complete the required coursework for the independent study. I’ve decided that this is going to be the last course that I take for a while since it will complete the certificate program. Also, I don’t want to go back for more education until my life calms down just a little bit (which I think is coming within the next two years, thankfully).
  • Grading, Grading, and More Grading: It’s midterm season at the college where I’m an Adjunct Professor so you know what that means – grading time! But it’s not only grading time for the class that I teach in the face-to-face setting. It’s also grading time for the classes that I teach for the online college. I’m thinking of asking the online college to reduce the number of classes that they assign to me – they’re giving me two or three each month and it is so incredibly time consuming that it’s painful sometimes…
  • Some Consistency at the Local Gym: Hey – I’ve been going to the local college gym at least once each weekend for the last three weeks. Not bad, right? And now you know why I’ve been able to read so much in the last few weeks – I’ve been on the treadmill. I’ll be heading to the gym tomorrow morning before the trick-or-treaters start knocking on my door. While my results at the gym haven’t been overly impressive (I’m not necessarily losing a bunch of weight – a pound here and there maybe), I am pretty pleased that I’ve been able to make it there one day each weekend during a very busy, crazy time for me.
  • Unending Projects at the Office: Hovering above all of the stuff written above is the fact that I have a pretty busy, increasingly stressful day job. Part of that stress comes from the person that manages my department and her mood swings, part of that stress comes from a changing workplace that expects the existing employees to transition to a new organizational structure without officially telling us what that structure will look like (or interviewing us for new positions), and part of that stress comes from the daily grind stuff that needs to be completed day in and day out that is made harder by the fact that my particular department is well-understaffed and thus we all have to do four/five different jobs each. And when you add in the fact that I’ve been doing a lot of the communication work for the organization – you can see how the stress builds up. Very annoying and, frankly, until this day-to-day stress goes away (which better happen soon), I think some of the other goals I have for my health and finances are going to be hard to achieve.
  • Changing the Face of Usable Web Solutions, LLC: Thankfully, after months of trying, I’ve successfully spun off one of my last remaining problem clients. Sure, the client screwed me on the way out the door, but I’m so excited that this client is gone that I don’t even care any more about the screw job. Whatever. Removing this client effectively removes more stress from my life and, ultimately, makes Usable Web Solutions, LLC a stronger, better organization. And with that, I’m beginning to change the nature of this small business. In the future, I’m going to focus on websites that are owned by the company and bring in advertising revenue because, honestly, that’s where the money is in this online business stuff. Going out there to find independent clients is not the way to find success in the website world.
  • Barnes & Noble’s New NookColor: Here’s a quick item for both the “Watch What You Say to Customers” and “Buyer Beware” files. For some awful reason I’ve been researching e-readers lately. I don’t know why – I love reading an actual book and I really don’t like the setup or arrangement of the e-readers that are on the market. But still, I began researching them and decided that I wanted to buy a Barnes & Noble Nook. However, something told me to wait. I wasn’t sure what it was that told me to wait, but I think it had something to do with the good voice in my head constantly shouting that I had dozens and dozens of physical books in my home that I haven’t even read yet! So, this buyer was wary of the products on the market and didn’t buy. Then, lo and behold, the NookColor is introduced and now I want to buy that thing as soon as possible (probably early next year once the inevitable glitches have been worked out). But the “Watch What You Say to Customers” file comes into play here because, just days before the NookColor was released I asked the guy at the local Barnes & Noble whether or not a new model was coming out and he swore up and down to me that, “We’re not Apple – we don’t have a new version of the product each year.” Oh yeah? Really? Hmmm…

There are a few different items that I’ve been working on that I didn’t think would find full entries on JerseySmarts.com. However, this stuff may be of some importance to a few of you so I hope that you enjoyed reading!

Might Be Time for a Change of Scenery at JerseySmarts.com

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Some of you may be surprised by this, but I actually spend a lot of time looking around the websites that I own and operate. In fact, yesterday I spent a lot of time looking around JerseySmarts.com and I have to admit that I am really happy with the contemporary minimalist design that is employed at this website. However, I do think that it might be time for a slight change of scenery – nothing major, but maybe a few tweaks here and there in order to make some of the features of the website more accessible.

For example, I’m sure that not many people who are first time visitors to the website realize how big of a story I am telling with my student loan repayment. There are a lot of ways to feature that more prominently on JerseySmarts.com and I have a few good ideas on how to do make it all happen. Also, since I do own and operate some other websites, I thought that I might take the opportunity that a redesign affords and incorporate some content and elements from those websites into this one, too.

What do you like to see when you come to a blog like this one? Are there any design features that, when you look at them, make you fall in love with a particular website? Let me know!