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In my last post, I blogged about how business decisions can sometimes have bad outcomes even when you do everything right in the decision-making process. I’d like to shift gears now and take a look at a helpful framework for assessing and managing risks in your business. Every potential risk has three elements that you need to consider: probability, severity, and capacity. 1. Probability What is the probability—or likelihood—that bad outcome x will happen? Of course, it’s not possible to precisely determine that. But we’re going for a general, statistical likelihood or an “educated estimate.” The probability of your house burning down is relatively low, assuming you’re not shooting fireworks out of your living room. By way of contrast, if you operate a logging company or sawmill, the probability that you or an employee(s) will get seriously injured or killed at some point may be relatively high. 2. Severity If bad outcome x happens, how severe are the consequences? I’m focusing on financial liability here, though it could also include outcomes like damage resulting in short-term business shut down, loss of licensing, reputational liability, and the like. Even if the probability of a bad outcome is low, if it happens the financial severity could be very high. Consider the earlier example of your house burning. For most folks, replacing a $500,000 home would be a severe outcome. 3. Capacity This pertains to your ability to withstand or handle a financial payout if bad outcome x actually happens and it’s as severe as expected. If you have plenty of resources to cover the risk of a bad outcome—and those resources aren’t already earmarked for other purposes—arguably you have the “capacity” to handle it. That’s essentially self-insuring. (Even though you have capacity, there can still be good reason to not self-insure.) On the other hand, if you don't have the resources, then you’d typically want to transfer the risk to a party that does have the capacity to handle it. And you’d typically do that through buying insurance, which is simply contractually transferring the risk to the insurance company in exchange for the premium you pay. None of this is rocket science. But I’ve found that distilling risk management to these three critical elements can be kind of a “light bulb moment” for folks who've not thought of it quite like that before. I hope that you find it a helpful framework for weighing and managing your risks going forward. Feel free to contact me here if you'd like to explore how I might be of help to you and your small business. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

As entrepreneurs and small business owners, we frequently wrestle with important decisions that can make or break our business. Maybe you’re considering launching a new service. Or selling a new product line. Or expanding your presence and market into another state or overseas. Or maybe you’re ready now to focus on your business as CEO while hiring (or contracting) talent for technical and financial matters instead of being so hands-on with those. If the results turn sour, does that mean you made a bad decision? Not necessarily. When we conduct proper due diligence on a matter, consider alternatives, and weigh the risks, it’s natural to then expect a good result. We incorporated the elements of wise decision-making and then understandably anticipate it will be successful. And thankfully, that’s often how things turn out. But even when we do everything that we should leading up to a decision, life can still throw us a curveball, right? So we’re diligent and do the best we can but hold things loosely because there are no guarantees. Sort of like this Decision Matrix. Our efforts and expectations in decision-making align with Quadrant 1, but sometimes we land in Quadrant 2, through no fault of our own. We all know people in Quadrant 3. They were anything but diligent, made stupid decisions, and somehow just got lucky. And now they think they’re freaking heroes ready to school you on how “you, too, can be a success.” Intolerable, but that’s life. So when you find yourself in Quadrant 2, get up, dust off, and go after it again. And ignore the unworthy fools in Quadrant 3. Feel free to contact me here if you're wrestling with key decisions in your business and could benefit from having a fellow "thinking partner" as you work through it. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

If you're a fellow Oregonian, then by now you’ve probably heard about the recent Oregon DMV data breach. This is a bad one as hackers got name, address, date of birth, driver’s license number, and the last 4 digits of Social Security number. And reportedly, it affects approximately 90% of Oregonians with state driver’s licenses and ID cards. Grrrrr! Apparently the breach resulted from a recent widespread attack on users of MOVEit, a common file transfer software. It’s used by government agencies nationwide, including the federal government. Personally, I want to know why Oregon DMV’s use of MOVEit got breached when apparently so many other government agency users did not. After the Equifax breach in 2015, I froze my credit and urged my investment advisory clients (separate firm) to do the same. Here’s a blog post I wrote at the time on freezing your credit: How to Really Protect Your Credit File from Theft. Here’s a link to a State of Oregon summary article on this recent breach: Oregon DMV Data Breach. And here’s a link to a June 16 letter being sent to current holders of Oregon driver licenses: OCIPA Notification: Breach of ODOT Data. We should all presumably receive this in a few days. Aside from freezing your credit, you may also want to monitor your income tax situation. If the DMV data gets sold on the Dark Web (possibly already has been)—and if nefarious characters have other databases with full Social Security numbers for cross-referencing—then they may attempt to file fraudulent tax returns using your data. One way to help fight that possibility is to request an Identity Protection PIN (IP-PIN) from the IRS and use that when efiling your tax return. Here’s an IRS article on how to do that: Identity stolen? Request an Identity Protection PIN from the IRS I’m not a guru on data security matters, but probably know more than the average bear. Feel free to contact me here if you'd like to discuss potential impacts on you or your small business. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

An Enrolled Agent (or “EA” as we’re called) is a tax professional who has earned the highest tax credential issued by the IRS. Along with attorneys and Certified Public Accountants (CPAs), Enrolled Agents are authorized to represent taxpayers before the IRS, including individuals, businesses, estates and trusts. Because of the word “agent,” folks sometimes get the wrong idea that Enrolled Agents work for the IRS. And the position does have a weird origin. In the wake of the American Civil War, the “Horse Act of 1884” was signed into law and created the position in response to fraudulent war loss claims. Enrolled Agents initially advocated for citizens and prepared claims against the government, but over time the position evolved to include representing taxpayers to the US government in resolving a broad range of tax matters. Maybe now that it’s 2023, the government should update the title so it actually makes sense to taxpayers. How does an EA differ from a CPA? For starters, the EA is a federal license, while the CPA is a state license. Becoming an EA is no cake-walk, but it’s not nearly as challenging as becoming a CPA. EA licensing is focused entirely on tax matters. CPA licensing includes some tax but also more broadly includes accounting, business matters, audit, and attestation of financial statements. One easy way to think about the differences is: “An Enrolled Agent is a tax expert that may or may not also be versed in accounting matters. A CPA is an accounting expert that may or may not also be expert in tax matters.” By licensing, an EA is permitted to do anything a CPA can do except audit or attest financial statements. How might a competent EA help a micropreneur? 1. Tax Preparation and Compliance Enrolled Agents can help you ensure your microbusiness becomes or remains compliant with federal tax laws. They can help identify potential deductions, credits, and exemptions that could minimize your tax liability while helping ensure accuracy and adherence to IRS regulations. 2. Tax Planning Forward-thinking Enrolled Agents can assist you in developing effective tax strategies tailored to your microbusiness. By analyzing your financial situation and business operations, they can provide guidance on how to optimize your tax position, maximize deductions, and take advantage of available tax incentives, potentially reducing your overall future tax burden. 3. IRS Representation If your microbusiness is faced with an IRS audit or examination, an Enrolled Agent can represent you before the IRS. They can communicate with the IRS on your behalf, handle correspondence, gather necessary documentation, and provide expert guidance throughout the process, helping to protect your rights and interests. 4. Tax Problem Resolution If your microbusiness encounters tax-related issues, such as unpaid taxes or tax liens, Enrolled Agents can assist you in resolving these problems. They are trained to handle complex tax matters, negotiate with the IRS, and propose solutions. Feel free to contact me here if you'd like to explore assistance with tax matters like these. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

It’s easy to get captivated with gross revenue figures. Nearly every business interview or company profile focuses on it. And business owners love to talk gross revenue when bragging about their company. By way of recap, gross revenue refers to the total revenue generated by a company from its primary business operations before deducting any expenses. It represents the initial financial inflow, highlighting the company's ability to generate sales or service fees. On the other hand, net income is the final profit figure that remains after subtracting all expenses, including operating costs, taxes, and interest payments from gross revenues. So while mentioning gross revenue is somewhat understandable because it gives you an idea of the size of business, it’s an utterly irrelevant metric for determining if a business is actually successful and profitable. Consider the obvious – which would you rather own: - A retail microbusiness that grosses $1.8 million a year, but has cost of goods, staffing, and other operating costs totaling $1.75 million. or - A service-oriented microbusiness grossing $500,000 a year, but with staffing and operating costs of $225,000. Without question, the first business would tend to get more attention and bragging rights due to its higher gross revenue. But the second business is obviously far more profitable (and quite possibly less headache as well). And let’s face it: we’ve all seen situations where big revenues are being generated but a clueless owner is running the business into the ditch. The only things that really matter with your microbusiness are: Are you meeting a specific need for clients/customers? Are you good at what you do and enjoying it? Is the business operating efficiently and generating a level of profit that meets your standards? If the answers are all “yes” then nothing else really matters. There's no reason for you to envy other owners just because their business has higher gross revenue. Feel free to contact me if you'd like to explore ways to make your microbusiness more profitable. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

Increasingly, folks in the second half of life (age 50+) are fulfilling lifelong dreams by applying their years of wisdom and experience to starting their own business. The arkenea blog shares 25 success stories of late life entrepreneurs that may give you some ideas and inspiration: These 50+ Year Old Entrepreneurs Will Make You Rethink Your Retirement Plan And the AARP has a platform specifically for helping those in the second half of life start their own business: Welcome to the Small Business Resource Center for People 50+ If you're a second-halfer running your own microbusiness, I'd be delighted to hear your story. Feel free to reach out through my Contact page. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

The IRS recently issued new cryptocurrency guidance and is hot on your trail if you bought and sold cryptocurrency and didn’t report it on your tax return. Here are the tax basics. You’ll treat cryptocurrency as property for tax purposes: If you receive bitcoin in exchange for your services, then your income is the fair market value of the bitcoin received. Your basis in the bitcoin received is its fair market value at the time of receipt plus any transaction fees incurred. If you receive bitcoin in exchange for your property, then your gain or loss is the fair market value of the bitcoin received less the adjusted basis of your property given up. Your basis in the bitcoin is its fair market value at the time of receipt plus any transaction fees incurred. If you give bitcoin in exchange for services, then the value of the expense is the fair market value of the bitcoin given. Also, the value of the services received less the adjusted basis of the bitcoin is a gain or loss to you. If you give bitcoin in exchange for someone’s property, then your gain or loss is the fair market value of the property you received less the adjusted basis of your bitcoin. Cryptocurrency is a capital asset (provided you aren’t a trader). Therefore, you pay tax on any gain at reduced rates, and losses are subject to capital loss limitation rules. Forks In the cryptocurrency world, a fork occurs when the digital register that logs transactions of a particular cryptocurrency diverges into a new digital register. There are two types of forks: one in which you don’t get cryptocurrency, and one in which you get new cryptocurrency. The IRS ruled that a fork in which you don’t get cryptocurrency is not a taxable event, and a fork in which you get new cryptocurrency is a taxable event and you’ll recognize ordinary income equal to the fair market value of the new cryptocurrency received. Example. You own J, a cryptocurrency. A fork occurs and you receive three units of K, a new cryptocurrency. At the time of the fork, K has a value of $20 per unit. You’ll recognize $60 of ordinary income due to the fork. Specific Identification When selling property, you generally sell it on a first-in, first-out (FIFO) basis, unless you are eligible to use the specific identification method. You want to use the specific identification method if you can because you can select the amount of gain or loss your sale will create. With FIFO, you have no choice. To use the specific identification method, you’ll have to either document the specific unit’s unique digital identifier, such as a private key, public key, and address, or keep records showing the transaction information for all units of a specific virtual currency, such as bitcoin, held in a single account, wallet, or address. This information must show the date and time you acquired each unit; your basis and the fair market value of each unit at the time you acquired it; the date and time you sold, exchanged, or otherwise disposed of each unit; the fair market value of each unit when you sold, exchanged, or disposed of it; and the amount of money or the value of property received for each unit. If you would like my help with your cryptocurrency, reach out here through my contact page and let's talk. [Sourced from the Bradford Tax Institute. Used with permission.] The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

As long as you haven't elected corporate tax treatment for your single-member Limited Liability Company, you can just write yourself a check (or electronically transfer funds) from your LLC's business account. From an accounting standpoint, the transaction to pay yourself is a credit to Cash and a debit to Member Equity. The IRS considers a single-member Limited Liability Company a "disregarded entity." In other words, they look through the LLC and see you as the proprietor and owner. It would actually be incorrect to run your compensation through payroll as a single-member LLC (without corporate tax election), though you would put any employees on payroll. If you have net profit from your single-member LLC, that will flow through to you as taxable income. That keeps paying yourself simple because you just draw equity as needed. No payroll administration, tax withholding, etc. A simplified example to illustrate: if your single-member LLC generates 2019 net income of $125,000, but you only draw out $85,000 during the year, you'll report the full $125,000 on your 2019 tax return. But that means you'll still have $40,000 of already-taxed Member Equity you can draw out in the future. A multi-member LLC is automatically treated as a partnership, unless the members elect corporate taxation. In a partnership, the partners will be taxed on their share of the LLC's net profits (if any). Periodic draws against profits or guaranteed payments could be set up but, as with single-member above, you wouldn't run that through payroll administration for the partners. (You do use payroll for any employees.) If a multi-member LLC elects to be taxed as a corporation, then members typically would be treated as employees of the corporation, establish salaries, and run their salary through payroll administration. For more information, here's the IRS: LLC Filing as a Corporation or Partnership. If you need entity-related tax guidance and would like to discuss these matters, connect with me here and let's talk. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

If you are self-employed, you have much to think about as you enter your senior years, and that includes retirement savings and Medicare. Here a few thoughts that will help. Keep Making Retirement Account Contributions, and Make Extra “Catch-up” Contributions Too Self-employed individuals who are age 50 and older as of the applicable year-end can make additional elective deferral catch-up contributions to certain types of tax-advantaged retirement accounts. For the 2019 tax year, you can take advantage of this opportunity if you will be 50 or older as of December 31, 2019. You can make elective deferral catch-up contributions to your self-employed 401(k) plan or to a Savings Incentive Match Plan for Employees (SIMPLE) IRA. You can also make catch-up contributions to a traditional or Roth IRA. The maximum catch-up contributions for 2019 are as follows: 401(k) Plan - $6,000 SIMPLE IRA - $3,000 Traditional or Roth IRA - $1,000 Catch-up contributions are above and beyond the “regular” 2019 elective deferral contribution limit of $19,000 that otherwise applies to a 401(k) plan. the “regular” 2019 elective deferral contribution limit of $13,000 that otherwise applies to a SIMPLE IRA. the “regular” 2019 contribution limit of $6,000 that otherwise applies to a traditional or Roth IRA. How Much Can Those Catch-up Contributions Be Worth? Good question. You might dismiss catch-up contributions as relatively inconsequential unless we can prove otherwise. Fair enough. Here’s your proof: 401(k) catch-up contributions. Say you turned 50 during 2019 and contributed on January 1, 2019, an extra $6,000 for this year to your self-employed 401(k) account and then did the same for the following 15 years, up to age 65. Here’s how much extra you could accumulate in your 401(k) account by the end of the year you reach age 65, assuming the indicated annual rates of return below: 4% Return: $136,185 6% Return: $163,277 8% Return: $196,501 Is There an Upper Age Limit for Regular and Catch-up Contributions? Another good question. While you must begin taking annual required minimum distributions (RMDs) from a 401(k), SIMPLE IRA, or traditional IRA account after reaching age 70 1/2, you can continue to contribute to your 401(k), SIMPLE IRA, or Roth IRA account after reaching that age, as long as you have self-employment income (subject to the income limit for annual Roth contribution eligibility). But you may not contribute to a traditional IRA after reaching age 70 1/2. If you have the extra resources, consider contributing to a Roth IRA, which does not have the age restriction or Required Minimum Distributions. Claim a Self-Employed Health Insurance Deduction for Medicare and Long-Term Care Insurance Premiums If you are self-employed as a sole proprietor, an LLC member treated as a sole proprietor for tax purposes, a partner, an LLC member treated as a partner for tax purposes, or an S corporation shareholder-employee, you can generally claim an above-the-line deduction for health insurance premiums, including Medicare health insurance premiums, paid for you or your spouse. Key point. You don’t need to itemize deductions to get the tax-saving benefit from this above-the-line self-employed health insurance deduction. Medicare Part A Premiums Medicare Part A coverage is commonly called Medicare hospital insurance. It covers inpatient hospital care, skilled nursing facility care, and some home health care services. You don’t have to pay premiums for Part A coverage if you paid Medicare taxes for 40 or more quarters during your working years. That’s because you’re considered to have paid your Part A premiums via Medicare taxes on wages and/or self-employment income. But some individuals did not pay Medicare taxes for enough months while working and must pay premiums for Part A coverage. If you paid Medicare taxes for 30-39 quarters, the 2019 Part A premium is $240 per month ($2,880 if premiums are paid for the full year). If you paid Medicare taxes for less than 30 quarters, the 2019 Part A premium is $437 ($5,244 for the full year). Your spouse is charged the same Part A premiums if he or she paid Medicare taxes for less than 40 quarters while working. Medicare Part B Premiums Medicare Part B coverage is commonly called Medicare medical insurance or Original Medicare. Part B mainly covers doctors and outpatient services, and Medicare-eligible individuals must pay monthly premiums for this benefit. Your monthly premium for the current year depends on your modified adjusted gross income (MAGI) as reported on Form 1040 for two years earlier. For example, your 2019 premiums depend on your 2017 MAGI. MAGI is defined as “regular” AGI from your Form 1040 plus any tax-exempt interest income. Base premiums. For 2019, most folks pay the base premium of $135.60 per month ($1,627 for the full year). Surcharges for higher-income individuals. Higher-income individuals must pay surcharges in addition to the base premium for Part B coverage. For 2019, the Part B surcharges depend on the MAGI amount from your 2017 Form 1040. Surcharges apply to unmarried individuals with 2017 MAGI in excess of $85,000 and married individuals who filed joint 2017 returns with MAGI in excess of $170,000. Including the surcharges (which go up as 2017 MAGI goes up), the 2019 Part B monthly premiums for each covered person can be $189.60 ($2,275 for the full year), $270.90 ($3,251 for the full year), $352.20 ($4,226 for the full year), $433.40 ($5,201 for the full year), or $460.50 ($5,526 for the full year). The maximum $460.50 monthly premium applies to unmarried individuals with 2017 MAGI in excess of $500,000 and married individuals who filed 2017 joint returns with MAGI in excess of $750,000. Medicare Part D Premiums Medicare Part D is private prescription drug coverage. Premiums vary depending on the plan you select. Higher-income individuals must pay a surcharge in addition to the base premium. Surcharges for higher-income individuals. For 2019, the Part D surcharges depend on your 2017 MAGI, and they go up using the same scale as the Part B surcharges. The 2019 monthly surcharge amounts for each covered person can be $12.40, $31.90, $51.40, $70.90, or $77.40. The maximum $77.40 surcharge applies to unmarried individuals with 2017 MAGI in excess of $500,000 and married individuals who filed 2017 joint returns with MAGI in excess of $750,000. Medigap Supplemental Coverage Premiums Medicare Parts A and B do not pay for all health care services and supplies. Coverage gaps include copayments, coinsurance, and deductibles. You can buy a so-called Medigap policy, which is private supplemental insurance that’s intended to cover some or all of the gaps. Premiums vary depending on the plan you select. Medicare Advantage Premiums You can get your Medicare benefits from the government through Part A and Part B coverage or through a so-called Medicare Advantage plan offered by a private insurance company. Medicare Advantage plans are sometimes called Medicare Part C. Medicare pays the Medicare Advantage insurance company to cover Medicare Part A and Part B benefits. The insurance company then pays your claims. Your Medicare Advantage plan may also include prescription drug coverage (like Medicare Part D), and it may cover dental and vision care expenses that are not covered by Medicare Part B. When you enroll in a Medicare Advantage plan, you continue to pay Medicare Part A and B premiums to the government. You may pay a separate additional monthly premium to the insurance company for the Medicare Advantage plan, but some Medicare Advantage plans do not charge any additional premium. The additional premium, if any, depends on the plan that you select. Key point. Medigap policies do not work with Medicare Advantage plans. So if you join a Medicare Advantage plan, you should drop any Medigap coverage. Premiums for Qualified Long-Term Care Insurance These premiums also count as medical expenses for purposes of the above-the-line self-employed health insurance premium deduction, subject to the age-based limits shown below. For each covered person, count the lesser of premiums paid in 2019 or the applicable age-based limit. Your age as of December 31, 2019, determines your maximum self-employed health insurance tax deduction for your long-term care insurance as follows: $790—ages 41-50 $1,580—ages 51-60 $4,220—ages 61-70 $5,270—over age 70 How to Claim the Above-the-Line Deduction According to the draft version of the 2019 Form 1040, you claim the above-the-line deduction for self-employed health insurance premiums on Line 16 of Schedule 1 of Form 1040 (Additional Income and Adjustments to Income). I’m Here Your retirement and medical plans become more important as you enter and journey through your senior years. If you have questions about them, reach out here through my contact page and let's talk. [Sourced from the Bradford Tax Institute. Used with permission.] The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

The simple maneuver of converting your personal residence to a rental property brings with it many tax rules, mostly good when you know how they work. The first question that arises when you convert a personal residence into a rental is how to determine the property’s tax basis for depreciation purposes during the rental period and for gain/loss purposes when you eventually sell. Weirdly enough, two different basis rules apply: If, after conversion to a rental, you sell at a gain, your basis on the conversion date is the usual computed amount (cost of home plus improvements, minus depreciation—such as from a home office). If, after conversion to a rental, you sell at a loss, your basis on the conversion date is the lesser of the computed basis or the fair market value. Once you’ve converted a former personal residence into a rental, you must follow the tax rules for landlords. Here is a quick summary of the most important things to know: You can deduct mortgage interest and real estate taxes on a rental property. You can also write off all the standard operating expenses that go along with owning a rental property: utilities, insurance, repairs and maintenance, yard care, association fees, and so forth. Finally, you can also depreciate the cost of a residential building over 27.5 years, even while it is (you hope) increasing in value. If your rental property throws off a tax loss, things can get complicated. The so-called passive activity loss (PAL) rules will usually apply. In general, the PAL rules allow you to deduct passive losses only to the extent you have passive income from other sources, such as positive income from other rental properties or gains from selling them. Eventually your rental property should start throwing off positive taxable income instead of losses, because escalating rents will surpass your deductible expenses. Of course, you must pay income taxes on those profits. But if you piled up suspended passive losses in earlier years, you now get to use them to offset your passive profits. Another nice thing: positive taxable income from rental real estate is not hit with the dreaded self-employment (SE) tax, which applies to most other unincorporated profit-making ventures. The SE tax rate can be up to 15.3 percent, so it’s a wonderful thing when you don’t have to pay it. One other good thing is that your net rental profits may qualify for the Section 199A deduction. Another good thing is that if your rental property rises to the level of a trade or business, your rental profits avoid getting socked with the 3.8 percent net investment income tax (NIIT). When you sell a rental property that you’ve owned for more than one year, the profit (the difference between the net sales proceeds and the tax basis of the property after subtracting depreciation deductions during the rental period) is generally treated as a long-term capital gain. Always keep in mind the good news here. You don’t pay the taxes on the property appreciation until you sell. Remember those suspended passive losses we mentioned above? The suspended losses are ordinary losses. When you sell a rental, you can find two great benefits: Gains are tax-favored capital gains. And then, to the extent of your gains, you release suspected passive losses that offset ordinary income. And always keep this in mind: rental real estate owners can avoid taxes indefinitely using Section 1031 exchanges (named after the applicable section of our beloved Internal Revenue Code). The tax code totally mislabeled the 1031 exchange. It’s absolutely not an exchange or a swap. It works like this: You sell your property. You buy a new, more expensive property. Your Section 1031 exchange intermediary (such as a bank) handles the paperwork, and that makes the taxes go away. If you are considering converting your home into a rental property and would like my advice on the conversion, connect with me here and let's talk. [Sourced from the Bradford Tax Institute. Used with permission.] The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

What would a blog focused on micropreneurs even be if it didn't include a list of resources to help you prosper with your microbusiness? Check out these highly-rated books (all available on Amazon): Making a Microbusiness (Angela Ford) Big Enough: Building a Business That Scales with Your Lifestyle (Lee LeFever) Tiny Business, Big Money: Strategies for Creating a High-Revenue Microbusiness (Elaine Pofeldt) The Startup Checklist: 25 Steps to a Scalable High-Growth Business (David Rose) The Million-Dollar, One-Person Business, Revised: Make Great Money. Work the Way You Like. Have the Life You Want (Elaine Pofeldt) The Solopreneur's Money Manifesto: How to Master Your Finances and Create the Life You Want (Gabe Nelson) The Lean Startup: How Today's Entrepreneurs Use Continuous Innovation to Create Radically Successful Businesses (Eric Ries) The Minimalist Entrepreneur: How Great Founders Do More with Less (Sahil Lavingia) Books aren't your thing? You might prefer these podcasts: Fascinating Entrepreneurs (Natasha Miller) The Accidental Entrepreneur Solopreneur Money (Gabe Nelson) The Solopreneur Hour Podcast (Michael O'Neal) Startups for the Rest of Us Solopreneur SOS (Karen Murray) I welcome your feedback on any of these. And if you've found value in other resources that aren't on this list, please let me know so we can share the wealth with our fellow micropreneurs. The McClanahan Tax Blog is for informational purposes only. See Disclosures page.

Oh, for the old days when US income taxes were much lower and filing your return was much simpler, right? Did you know that Congress first imposed a personal income tax in 1861 to help pay for the American Civil War? Aside from the war, back then US government operations were mostly funded through excise taxes, tariffs, customs duties, and public land sales. It wasn't until the Revenue Act of October 1913 that a US income tax became a permanent fixture. That legislation put into action the Sixteenth Amendment to the US Constitution (authorization to levy income tax) which was passed in 1909 and ratified in early 1913. Enough of the history lesson. Check out this first 1913 Form 1040 income tax return, a mere four pages long including instructions.