👋🏽 Hello, Future Financial You.

This is a seasonal, weekly newsletter about practical finance for values-driven independent workers and business owners. I want the future you to be set up RIGHT.

Below, I warm up your CFO brain with curated finance bits from the web, a money task, and reminders so you can stay ahead of financial mayhem.

If this was forwarded to you, sign up here. Missed a newsletter? You can peruse the archive here.​

📰 Finance on the www.

• ​Trump-era tax cuts set to expire after 2025 — here’s what you need to know. (CNBC)
• ​A surging IRS tax penalty is costing Americans billions. (MSN)
• Society taught us to be consumers instead of owners. Buying a new phone or car = normal. Investing in a business or mentorship = crazy. If you wanna be rich, you have to stop thinking like a consumer… And start thinking more like an owner. Ask yourself, ‘What can I own that makes me money?’ Could be a business, an investment, products to sell. Then start making a plan to make it happen. You’ll quickly realize how easy it can be to make more money. All it takes is changing the way you think. (Instagram/@basharjkatou)
  ​

☑️ LL Money Do.

Revisit your personal money stack to ensure it serves and empowers you to be your best money self.

As a pass-through business, your personal and business money are wedded.

A reminder of what a pass-through business is,

A pass-through business is a sole proprietorship, partnership, or​ S corporation​ that is not subject to the ​corporate income tax​; instead, this business reports its income on the ​individual income tax​ returns of the owners and is taxed at individual income tax rates. (Source: ​Tax Foundation​)

Your business income is your personal income, so how you track your personal finances is as important as how you track your business money. They go hand-in-hand. I often see people misinterpret personal and business tax deductions, and because of this, their bookkeeping can get a little whacky. You want to be able to track your business deductions and credits and your personal deductions and credits appropriately.

Keep your data clean, fellow CFOs.

To do this, it starts with your personal money stack or your toolkit to manage your personal finances.

Here is my stack.

1. Personal Checking: This holds day-to-day cash to pay bills and receive deposits.
2. Credit Card 1: This card is for day-to-day expenses, like groceries, recurring bills, etc. Given the missing layer of security, I do not subscribe to nor use a debit card, so I rely heavily on this card. Also, it gives me a general idea of how much "living" is for me monthly.
3. Credit Card 2: This card is for outlier expenses—things I want but don't need and that aren't really part of living, like all my jump ropes, clothes, gear, and travel expenses. I call these my investments in FUN.
4. High-interest savings account: This account holds my emergency funds. I use Betterment, and right now, I earn 5.50%.
5. A personal escrow account (a boring savings account): This is where I stash cash away for things earmarked for later, like property taxes, insurance premiums, planned large expenses (a deposit), etc. I like to save a little bit each month instead of decimating my cash for the month the bill is due.
6. Retirement accounts: These are IRAs, Roth IRAs, and unrolled-over 401ks. I have a SEP IRA, an IRA, and a Roth IRA.
7. Brokerage/investment accounts: These are basic investment accounts where I can buy and sell stocks, ETFs, REITs, mutual funds, etc. I stash money in them when I've maxed out my retirement contributions. I have multiple for different purposes.
8. A system: This is a tool(s) to see all your accounts in one place like a spreadsheet, an app, software, a ledger, whatever. I moved to Tiller this year after Mint sunsetted. Related, earlier post: ​​Daily or weekly, do your personal bookkeeping. (#92)​​​

Reply with questions. You've got this.

⏰ Reminders.

It's almost mid-year, so it's time to check your financial management. Is your bookkeeping caught up? Have you started contributing to your SEP? Have you paid your 1st and 2nd estimated tax payments for 2024? (Learn about the penalties for underpaying ​here​.) Anything blocking your progress?

Important dates.

• Monday, September 16, 2024: 4th 2024 payment estimated federal and state taxes are due.
• Monday, September 16, 2024: Extended returns due for partnerships (including LLCs) and S-corporation returns.
• Tuesday, October 15, 2024: Extended personal returns (Form 1040) and C-corporation returns are due + contributions to solo 401(k) plans or simplified employee pension (SEP) plans for 2023 by self-employed if you received a filing extension.

If you learned something and know someone who could do the same kind of learning, please do both of us a solid and forward this to them!

Your fan,

LL
​

Thanks for reading / Read my disclaimer /. You are on this list because you subscribed. If the LL Letter is not your thing, unsubscribe below / Preview in browser / Adulting / Forwarded to you? Sign up here. / Archive / Issue #107, Week 25, 2024