Ever hear these three little letters and shudder? IRS…
If so, this episode is for you! Erin Armstrong is the founder and CEO of Enlightened Accounting. She supports female small business owners in building out the financial literacy and planning of their business. This puts them in a zone of confidence, control, and future planning for them and their families.
Erin is the best at making accounting empowering, not scary.
Tune into this episode to hear:
- Practical tips on how to start saving for retirement as an entrepreneur (and saving FAR more than you could at a 9-5 job)
- What REALLY happens if you get audited by the IRS
- Actionable ways you can deduct everyday expenses from your business… today!
Transcript of Episode
Leah Gervais: Hey visionaries. Welcome back to the your biggest vision show. I’m your host, Leah Gervais, and I’m very excited to have this week’s guest. She is a friend of mine. She is an incredible entrepreneur and she’s helped me a lot with my own business. We have Erin Armstrong here. Hi Erin.
Erin Armstrong: Hi. Thanks for being here. Oh, thank you for having me.
Leah Gervais: Oh, my pleasure. Alright, I’m going to read a little bit about you and then we’re gonna dive in and hear your story. So hearing is the founder and CEO of enlightened accounting LLC, a tax and financial consulting firm that focuses on financially empowering small business owners and female entrepreneurs. Erin’s unique approach includes helping people with the nuts and bolts of business finances such as accounting practices, tax strategy, profitability, budgeting and cashflow. Simultaneously, she helps her clients identify their financial fears and improve their money mindset so they can move forward in a competent, proactive, and empowered way. Erin’s works with hundreds of business owners across the country in dozens of industries. She’s led workshops in LA, New York, Chicago, and other major cities. She’s been featured in media such as connected women’s magazine HuffPost and the Forbes have claimed she did it her way podcast. So I don’t know if you even like know this background Erin, but I just want to tell for my listeners that I found Erin, um, like most things happen in life at the exact perfect time when I was like really needing her and I didn’t even really know it.
Erin Armstrong: And if for me it was, you know, I have a CPA, I grew up with a CPA father, so I’ve always really liked the financial side of business. I know a lot of popular opinion things that entrepreneurs don’t, it’s like always been kind of fun for me. But there’s this social media trend of people who talk about making money in a very woo way, which is kind of fun and kind of exciting, but like not actually to have a business totally works. So, you know, there’s two parts. And so I was getting frustrated because I felt like I was being taught how to sell better, which was good, but not really construct the back part of my business in a really long term and big picture way. And I remember thinking about this frustration in sure enough then I think I found you on social media.
Leah Gervais: What I love about Erin and her approach is that she is an accountant. She will give you the honest truth, she will work with you through the numbers, but she also is just such a sweet and optimistic person and she carries that through. When she works with you and teaches about money, it’s not like you have to get rid of the positive thinking. It really is both. And that’s so aligned with my philosophy. So I’m very happy to have you.
Erin Armstrong: Thank you. Thank you.
Leah Gervais: My pleasure. So, um, take me back a little bit. I know you’re a CPA and what I really want to hear about is how you went from being an accountant and being a CPA to working in this crazy world of entrepreneurs with really fast paced entrepreneurs. And where did that start? What was the bridge?
Erin Armstrong: So I have a really unusual story, really unusual. Um, I grew up as most people do think I was going to do different things. And then by the time I was in high school, I kind of landed on I was going to be an actress and, um, and no came from like when my mom had enrolled me in community theater early on and you know, all this stuff. And so this is a very, I shared this because it’s a very unusual bridge. Um, I went to, I went and studied in New York city, um, the American Academy of dramatic arts when I’ve sent a team. And then I went to LA and I decided one of the best decisions in my life. I didn’t know it then, but I had this coach in. Um, I remember I was kind of at the time thinking of like, well, if I was just thinking about performing the rest of my life, I really want to go to a conservatory.
And I, and I had some options and, but I had like in my mind that I also wanted to degree and it was kind of weird because I really wasn’t thinking like that’s a fallback. It was just like, for some reason that sounded like I should have a degree. And so, um, I remember bringing this up to her and she was like, well, you know, if you’re not, if you’re open to it, why not have more options later in life? So I was like, Oh yeah, that’s a good point. And um, you know, and so I went and visited Pepperdine university. I loved it. I got off the plane and I was like, could smell the ocean. I was like, this is a water person. Like I just love the water. And so I ended up going there and while I was in school, it was partially why I had chosen that is cause I was in Los Angeles so I could kind of pursue, um, I was doing a lot of voiceover work, modeling work. Um, I was trying to put my foot in the acting world, but that didn’t really happen until after I graduated. And so for the first few years after graduating though, I was a working and struggling poor actress. [inaudible]
The thing, and the thing about that experience was like most people, um, even though I was really blessed to have some actually more jobs and I’d seen a lot of my peers, I didn’t, I always had like some side stuff going on because I could never rely on income. And um, so I had a few different creative businesses and kind of through that process I had a lot of, um, and it was cumulative. It wasn’t like immediate, but over time I really got frustrated with the kind of responses I got when I would go to my accountant, when I ask questions that I thought would have like a black and white answer. And then I ended up walking away with the even like more confused feeling I had asked. And it kind of like, you know, I guess I was naive at the time to like I had a personality where I started getting kind of miffed like this is ridiculous, you know?
And um, and, and I don’t know, I’ve always had an analytical side at the same time, so I thought eventually I was just like, well, I can figure this out. Just can’t be that hard. Like I’ll just read some tax law now. I know that’s not normal, but that was just my [inaudible] at the time. Yeah. Which is my thinking. And the funny thing is I really fell in love with it and I know that’s an unusual thing to say. And so if you’re listening to me, please don’t discount me immediately. What, what I thought was so fascinating was that the more I read, the more I was like, this is completely opposite of what I thought, what kind of, we’ve been conditioned as a culture to believe in, in the sense that what I read when I was like reading the tax code and read these court opinions, I was like, this is like actually really we live in a society in the U S we are really um, set up in a way that the tax law and taxes and all that can really help us as business owners.
And it’s, you know, if we’re, if we’re listening to just kind of the language out there, it’s always like, even when we hear those positive mindset folks as you were talking about the law of attraction, which give me some of that every day. Like there’s a time and a place for it and, and I’m all about that. But you also hear, I work with a lot of folks that are kind of big names and in that space online and they all have this, Oh, but taxes are totally separate thing. And Oh, the government’s taking all my money. And it’s just really a lot of negative stuff. And so I guess that’s what excited me is like, I don’t, I guess it’s just because we don’t talk about taxes. No one wants to Wade into this. And for whatever reason I’m willing to go here. And so I started to, I really just read it in the beginning to like get clarity for myself and what I was doing with, with the acting with I small business work.
Um, and I started realizing what a financial difference that made for me. Like, so like actually in terms of money, like what was in my pocket, but I also really loved it. Really. I didn’t expect this at all. And I think that is why I do the work I do today is it really gave me like a different level of confidence. Um, and that’s a funny thing to say, but I see it happen all the time with people. I think what I didn’t know until that point I like probably many or most people in the U S if you’re a woman you grow up and then there’s a few exceptions, but you take on a lot of negative money stories. Um, most people grow up, not with great financial examples. I grew up in a home that there were so many financial secrets that, you know, as a kid I was just a kid, so I didn’t know any different.
But what I’ve come to realize is how much that ingrained like kind of in even in my personality, just fear was kind of like it was there when it came to money, you know? And it’s scarcity and like, Ooh, bad guys and you know, and Oh, you can’t charge that. You know? And I just, the more I embraced this just at the time, like I was still doing, I wasn’t working in the world of numbers, but it really changed how I was showing up. And I loved that and it was really unexpected, like side benefit, you know? And so it really got me curious as to like, well, maybe I want to go a little with this. And so I started working with other small businesses. I’m not, Oh, let me clarify this. I’m not a CPA, so I’m in the state of Texas and I’m enrolled agent.
So it’s like a no, no, I just want to, for everyone listening, um, and um, you have to tell accountants. Yes. Yeah. And I’m licensed by the IRS. Right. So, um, yeah, but so I have some standing there. So I w I went and just over time I just started kind of like, I don’t know, I just kinda moved that direction. Um, I kept getting different, you know, certifications and licenses and it just, it, it continues to be something that really fills me up because I love working with the logistical side and numbers. But I think, you know, I certainly work with men, but I’d say the majority of my clients tend to be women. And I think it’s because there’s this component when we talk about finances, where it’s [inaudible], where it is partially emotional. It is partially like what was our experience, what is our experience now? What do we need to work through? And I think we really have to marry the two of those together if we’re really gonna move forward in a way that’s really proactive and really sustaining at least in the business world.
Leah Gervais: Right, right. Wow. What an amazing, I love the way you put it and that makes so much sense to me. Just how you found something that gave you confidence and you followed that. And you know, I know every time I’ve had to do in difficult financial things in my own life, the two that come to mind are student loans. I had student loans, I went to college. And um, my business obviously has been something that has, is, you know, not necessarily something one person should be handling on their own, but you do because it’s what you need to do. And, um, it can be daunting at times, but when you really sit down and even things to you, like I sit down every single Friday morning, I go through all my receipts, all my sales of the week, I count everything that I have made a sale on everything that I have spent on.
And of course there’s sometimes when you’re like, wow, I spent more this week than I should to, or Oh, I don’t really want to do this. But every time after I’m always like, you know what, I’m so proud of myself that I did that because I know what’s going on and I can’t get, that’s really where the lack of control comes in and the lack of confidence happens is because you just, you’re blindsiding yourself to a really important part of your business and even your life. So I love that you just started feeling more competent in general. When did you start in like in accounting or when did you really get into this?
Erin Armstrong: It was so I need to go back and look at exact dates, but it was either 2011. I was thinking about that this morning. I think it was 2011 that I officially started a business.
Okay, got it. You were sort of like freelance helping for sure. Yes, for a few years before that. But I think 2011 was the year that I was like, here’s an LLC. Eventually I can be an escort. But that was like, okay, this is a thing. So what were the first type of services you officially offered when you started it? So way back in the day, I um, did a lot of bookkeeping and a lot of what they would call historical bookkeeping. So it’s kind of like a little bit more specialized in bookkeeping. It would be like someone who, um, hadn’t filed with the IRS for like five years and didn’t have any records. And so they needed to recreate everything and then you would help them with the tax filing. So that was not, that is not the kind of job I do today, but it was such a great learning experience. Like it, it made me even more curious about things that happen with taxes. It was also like, it made me think preventatively. So now I work with people. I mean sometimes, sure I work with people that might be a year or so behind, but um, but it made me think about what are the things you need to be thinking about because these were people in general that tended to be very successful at least as far as sales go.
And then they just were like, Oh, okay, I’m just going to run with it, which is awesome until they got in trouble and um, that can’t be a good feeling. And uh, you know, so it just made me think, it made me think in terms of productivity, I did a lot of works with QuickBooks back in the day. I still do, but, um, back then it, QuickBooks online wasn’t a thing. So, uh, you know, it was like desktop, although I figured out a way to like remotely login to people and, and that was cool. Um, but now everything’s QuickBooks online, which is awesome. Um, and then it just gradually, like more if I felt started feeling more comfortable with like giving, actually what kind of happened is even in the bookkeeping services, people would start, you know, asking me more questions and I would feel more confident like saying, Hey, I noticed that as I, it does not do that.
Like I think you should do it this way or have you thought about this or, um, and so it was really fertile ground because nowadays I don’t offer just like bookkeeping as a service, but it really gave me an idea of what people aren’t necessarily thinking about but need to be thinking about because often they think, Oh, if I’ve got it in QuickBooks online or if I’ve got, um, if I’ve got a bookkeeper it, that’s enough and it’s a great step. But it’s not necessarily, that’s not all we need to be talking about. Right. So what do you, what would you say the majority of what you do now is your virtual CFO for businesses? Yes. So yeah, then the majority of the work I do right now is like kind of virtual CFO’s stuff. Yeah. It’s super fun. It’s, it’s businesses that are successful and then a certain level, you know, usually close to the million, several hundred thousand, but they need help figuring out how to make it more profitable and how to kind of take it to the next level.
Um, but asked to do a lot of consulting with small business owners that I don’t know or somewhere they’re there, they’re not at the very beginning of their career. You know, like they might be making like at least a professional wage to like 70,000 app and, and then you start having questions. And I think you alluded to this too, like I think that’s where you were at when we started talking. So I do consulting now, like where we might look at people, you know, this morning I had a conversation with someone who has built a really successful business in at least terms is creating like this brand and having regular sales. But her profit margin, like what she had left over was just not good. But the exciting thing was is just with a few tweaks, she’s going to have enough cashflow to feel really taken care of and, and part of that’s marrying in the tax stuff and part of it’s marrying in, you know, how you are handling the money. So it’s kind of all the pieces tied together.
Leah Gervais: Right, right. Do you, so if someone comes to you and they are kind of looking for that consultation phase, if they’re someone like me where it’s like, okay, I’ve started getting, I think that, you know, for me it was like I’m almost to six figures and I need to be more in control of what’s going on. Um, or someone, I know you’ve, you’ve referred to this and I, and I know you can’t disclose too much, but you’ve worked with some really big influencers and entrepreneurs out there. What are some of the most common mistakes you see people make and things that you just wish other people knew about?
Yeah, sure. So a few things. One thing I really don’t like kind of, I think this is around in our us culture, but then it’s definitely around the online space. It’s kind of like more and more and more, you know, like the more sales I make, the better I’m, the more important I am, the better I am can be true. But so often people aren’t thinking about longterm or even their expenses at the time because you know, yes, I’m not going to disclose anything. But I’ve seen behind the scenes of some, some of these really well known brands that we, if you’re on the online space, at least that we really know and love, and this isn’t to shame anyone or anything like that, but there is just, yeah you hit $1 million, but what do you have left to show for it? And so I think that’s where sometimes, especially in the beginning or for the first users, it’s really easy to get hooked onto.
Like, I want to make six figures or I want to make multiple six figures. And there’s nothing wrong with having any of these goals. Like that’s amazing. Go for it. But that’s not the ultimate because you have to be thinking, well, what am I going to get out of it? And actually that brings me to another pattern that’s been really prevalent this year. Um, I feel like I’ve worked with a lot of female business owners specifically who are making, uh, like really well with as at least as far as sales go. But they aren’t, I think business as it has to be mutual, like you need to give to your business, but your business needs to give back to you. Like you can’t just be taking all the responsibility, spending all your time. You need to be receiving something back in return. So I’m talking about really financially, but I’ve seen where a lot of people created this kind of amazing business, but they aren’t really prioritizing themselves.
And sometimes you hear people say like profit first. So I think realizing that, you know, maybe with the exception of when you’re first getting started, like when you don’t really have cashflow that’s different for everyone, whether that’s six months, a year or, but knowing that you have to start paying yourself. And it’s not even, I’m not talking from a tax or accounting standpoint, it’s purely to feel like on an energetic level where you don’t start building that resentment of like, because working all the time and you’re like, what do I have to show for it? Because you can always raise the benchmark and be like, Oh, when I make a hundred thousand bucks, then Oh by myself, when I make $200,000, you know, I’ve worked with a few this year who made a million and still weren’t paying themselves.
Right. And you’re like, well, if it’s going to start, we agree. And I’ve had moments of that I have had appointed in my business where I was like, Oh my God, I’m working all the time and I have to shift the way that I’m allocating resources because this is not sustainable. Um, but on the flip side, one of the things that I think is so cool about entrepreneurship and especially some of the more lifestyle influence businesses that we have online these days, you know, I have one, um, is that you, how do I say this without sounding, I just don’t want to, yeah. Not as, I might be clear. You, you can deduct a lot from your taxes, from your lifestyle. Like, and I’ll, you know, this, this is totally legal, so I’m comfortable saying it. I have a, I have an office in my apartment that I’m at right now and I deduct the portion of the office that I’m at right now that I pay for rent every month from my taxes. Um, you know, you kind of have the benefit of being able to do these kinds of things, which when I was at my nine to five job, I certainly didn’t have to do that. Makes my profit margin go down now. So it is kind of like there’s two sides of it, you know, and I’m early days when I was like first getting to six figures, I’m like, Oh, I want my profit margin to be so big, but I also don’t want to pay that. Yeah, you don’t need to be paying taxes on.
Leah Gervais: Sure. It’s a, it’s a yin and yang because, yeah. I love what you said and that’s kind of what like to the home office. Um, I know we’ve talked about it before and I’m a big like believer in taking the home office deduction and that’s one of those things. It’s like, I think that’s one of the things that excited me when I started reading the tax code is like, you know, it’s really set up in a way that if you are a business owner, you do get a lot of financial benefit now you want to make sure you meet the criteria and that sort of thing. But yeah. But yeah, you don’t get to do that as an employee, so that automatically kind of bumps up the income you save even albeit indirectly. Yeah. Well it does, but it also, it can clip. It also makes it, it’s kind of another expense that you might not be putting through your business so it also can make your profit, whatever. We’re talking about the same thing. But I love that you bring up a points because on the one hand it is very important to make sure that you aren’t, I mean, I don’t know. I think in the beginning the way I did it anyway and I’m not perfect, but I don’t, and I think that there’s more than one way to do things. My profit and margin for all of you listening out there, you know, you do spend more. I think in the beginning you have to get things off the ground. You have to learn how to do things. But you know, I think it’s important to come to a time where just like you’re saying, you, you, you stop raising this artificial benchmark of when you’re going to stop investing in that way. Spending in that way, not paying yourself in that way. And I think that it’s so amazing that you bring up that point because in the earlier days you can’t even imagine what it’s like to make six figures in dollars and you think once I make that much, everything will be fine. But to your point, some people are at seven figures and they’re still in that same dynamics. So it’s worth paying attention to pretty, pretty quickly.
Erin Armstrong: Yeah, I think so. And I’m going to go back to your original question, I think. Good. What is like, I think you were saying what are some big things to be aware of or things you wish could go? Okay. Yeah, I think sometimes I think sometimes in the beginning too like in is totally understandable. Everyone’s excited about what they’re doing because the whole point that you’re starting a business or side hustle is usually it’s like a passion or it’s your calling, you know, you’re testing the waters, right? Um, and of course that takes like all, most of your bandwidth, but I think I wish people made kind of financial, at least a baseline of financial literacy, a little bit more of a priority before it gets too big of a scale. Because I think, you know, I was at, so even though I was in the accounting world, I was able to put some of these practices into my business pretty early on or even have ideas like, um, I didn’t live in New York city, I didn’t need a car.
And I was like, Hmm. At the time I was driving this really old Honda civic and I was like, well, when it’s time to replace my car, it’s gonna be through the business. Because I met the criteria of what like would be a business card. And so like a year and a half later, I was like, yeah, I felt pretty, I’m like buying it through my business as a business vehicle. And not that, I mean, sometimes I give that example and people are like, well, I don’t have 40,000, you know, whatever it is. But it’s not really about the money. It’s sometimes I think, I think we think, Oh, we’ll know when we get to that stage. I guess sort of like the paying yourself, but it can really help you to just have, you don’t have to have all the answers. You don’t have to be an expert, you don’t have to be a professional by any means.
But if you just start getting awareness of like, Oh, okay, well yeah, I know what income and expenses are. What is this thing called the balance sheet and what does it show? And you know, because your accountant is going to ask about a few things every year, come tax time on that. And if you ever need a loan from a bank or bring in a partner, like there are some basic really basic principles that kind of you do. You know, if you don’t know, it’s not going to be the end of the world, but you’re not going to feel really in those conversations because then it’s like, I don’t know what it is…
Well, I see my clients frees up the most about is the quarterly tax filings for those of us that are self employed. And I think people, I mean it really is incredible to see, and I’m saying this to someone who used to be a little more freaked out than I am now. Yeah. I feel so confident in doing the work you do with your clients, like doing your thing, doing your zone of genius and then it’s like you have to pay an estimated keyword estimated like Gayle, if it’s the wrong number, estimated amount. And everyone’s like, yeah, you know, that kind of energy I think is really what you alluded to too about people just feeling out of control. And so for a specific example like that, um, where you know, you have to pay these quarterly taxes, how do you help people get over this fear of like, if you make the wrong amount, you know, it’s, the IRS is not going to come after you and kill you. Knock on wood. But like that’s how I feel.
Yeah. Yeah. Well, yes, no, I know that’s how most people feel. I haven’t let you in on a secret. I’m not immune even being certified by that or licensed by the IRS. I’m not immune to like I remember, I think it was like two months ago I went to my mail center and I opened the box and I saw IRS and I was like, Oh, am I going to be audited? Like because it was unexpected. I was like, what could that be? And then it was like an address change. Like the hyphen changed and they let me know. So thank you. But it was either, I was, I actually thought this is a great example that it’s not, however our society is, it is really universal because I would think truly by now that I would not be like, I don’t even if I was audited, okay, I’m, I’m pretty confident that I know how to handle that since I’ve walked so many other people through it.
But still, it was just like a moment for me too. And I think what we just have to realize is, you know, I mean a few things, there’s no magic cure all for having fear of the IRS. But I think there’s a few things that people might be appreciate, like me bringing up. One is, you know, what can help you at least in feeling better about paying taxes even though you miss. So might not like it is, you know, I just look around sometimes and I think, wow, public school, wow, there’s this amazing park. Wow. You know, look, I know we don’t all agree with the government or the current administration or whatever it is. We’re never going to all agree on what’s going on. But even so, our tax dollars do go to all of us having a better life. So I think if we can just bring that in and feel that sometimes that’s a very different than like, Oh, it’s eating my money and it’s this abstract like dark thing. Right.
Leah Gervais: I love that. I have to tell myself about that with New York city all the time because the [inaudible] are, yes.
Erin Armstrong: Yeah. You lived in a place where they’re very high. Yes, yes. Um, and then another thing I think that people don’t, because the fear is just kind of prevalent in our culture. You know, most people, if I ask no, someone that got audited and they hit, just talk on and on about what a horrible experience it was and has the most stressful thing in their life and blah, blah, blah. It might’ve been for that person, but what you, one, you can do things that are preventative, but two, even if you get like a letter in the mail saying you’re being audited like 99 out of a hundred times, it’s over a very, it’ll tell you it’s a very specific piece. It’ll in every kind of letters different, but it’s not like, Oh, you’re being audited for all these years. We need all your books and Oh, you did this.
Now it might say you owe $100,000 which would feel really scary if you’re not planning for it. But if you ever find yourself in that position, make sure you go work with like an enrolled agent. Some CPA offices specialize in tax litigation. There’s also tax specialists at tax lawyers. Excuse me, that will do that and you would probably have to pay them something. But here’s the thing. So often if you try to represent yourself before the IRS, and I don’t say this to be scary, I just say it to be helpful. People have so much fear themselves that they can’t listen. I’ve seen this happen a few times to what’s being said by the auditor. And so they start handing all this extra information out, which then expands the audit and then it really does become this monster. And to be honest, I mean, yeah, auditor’s talk and what would be a little bit more accounting jargon or tax jargon.
So it’s not going to be something the average person’s really comfortable with. But if you go with someone and they’re like, Hey, I got this letter, I am afraid to call about it, but I don’t think this is right. Could you, you know, if you have the in between person that has, um, has the right to represent you before the IRS, those conversations go much more smoothly. And sometimes they just disappear. Cause sometimes it’s just a small misunderstanding. Or sometimes it is like, okay, we need to find this one statement and let’s provide it. But it’s not like it doesn’t automatically explode into this horrible your life. I love what you’re doing. This is a technique I do all the time with my clients, with all of the things is chasing a fear. So we have this fear of being audited. Maybe that’s a phrase you have about the IRS. Okay. So if you get audited then you just gave us several options that you can do. One, it sounds like for the most part it can be figured out pretty quickly, especially to get them on who knows what they’re doing and can represent you in front of the IRS. It would probably not be the most fun time in your life, but that is literally the fun house mirror version of what’s actually going on, which is just a little bit of a blimp. It’s not like this huge scary monster, you know? And then if you do owe the IRS something, then you pay it. If you don’t have the money, there’s a payment plan. Like it’s like,
Leah Gervais: Yeah. I’m so glad you brought up climate plans too, because that is something that I think most people don’t know about. Like no one has ever been hauled off by the IRS on a payment plan. They are very generous, like so it’s not like you’re not, the only people that go to jail are people that have literally hidden money and it’s [inaudible].
Right. Hundreds of thousands of dollars.
Right? Yeah. Or they don’t pay after many conversations, you know, like long periods of time, so, right. You know, that doesn’t happen overnight. It happens over a long process.
It’s a malicious thing and I think that that’s what a lot of my clients don’t really like forget is that if you’re, you know, if you’re doing the best you can, if you are being genuine, you’re trying to learn. People that get really get in trouble for tax issues are people that are criminals. They know what they’re doing is very wrong. Oh my God, I accidentally charged,
right. No, no. Like worst case scenario, they’re like, Oh, you shouldn’t have charged those meals. And then you pay the small amount of talks on it. It’s like, okay, okay.
Leah Gervais: Let’s move onto something a bit more positive. Sorry cause I feel like we’re trying to, let’s see, positive criminals. Anyway. Another one of my favorite things that I’ve learned from you and that I think you really empower business owners, especially self-employed business owners to do is save for retirement and think about some plans. And I know that that was one of the hardest things for me to navigate when I left my nine to five job to be self employed. I had a four three B. I also have been saving with my a Roth IRA for several years, which I can still do. Um, what do you think is the best place for people to start if they’re recently going from a nine to five to self employed? They do not have any sort of 401k four Oh three B within their own organization and they don’t even know where to begin to save for retirement.
Erin Armstrong: Well, if they haven’t done anything, I think a Ross is the easiest entry point. But you’re limited to that every year, right? Like major league. But if you want to contribute it do, I mean every little bit counts. So if you haven’t done anything,
could you guys do like a sentence or two of what the Roth IRA looks like?
Yeah. So I know most people probably know, but it’s better safe than [inaudible]. I’m sorry.
Yeah. So, and now I’m like embarrassed. I should have looked at my numbers. It’s been so long since I’ve looked at them. So it’s, I want to say it’s like, isn’t it 6,000 a year? Yeah. 6,500 5,500. Actually they bumped it up this year. So I do know a little more than I thought. Okay. You know, kind of like out of sight, out of mind. Sometimes you’re like, wait a second. Um, so you can contribute to that. And that’s like its own thing. I mean, that might sound silly, but it’s, it’s, that is completely separate than all the other retirement contributions. Right? Yeah. And that’s why it’s the easiest to contribute to. You have never contributed to anything because basically you just Google the bank that does it and they set you up and you just put your money in and you’re good to go. Um, the other, then you have some really lucrative options, which is like goes back to how you could really have financial benefits as a self employed business owner as opposed to working at your nine to five.
There’s a lot of ins and outs and I know, uh, Leah, you know this, cause I spent an hour talking about it one day and probably our eyes were all rolling back cause there’s so much. But, but the gist of it is, you know, you have to be aware because it does, you do have to take some things into account things like do I have an employees? Do I, will I have an employees employees, excuse me, years, you know, a year from now and how much do I want to be contributing possibly to their accounts. But the reality is as a business owner you can contribute like 56,000 a year. And yes, it is a 56,000 cause I always get someone after I say that, they’ll email me like, did you really say that? Yes I did. And that’s because you actually have the possibility of contributing both as the employee and the employer.
Amazing. Yeah. Which is amazing. And I don’t know any employer out there that matches that could possibly have that in your account. So I think it’s, you know I, that is one of the things too that is, is people who work for themselves are often like, Oh man, I’m screwed because I can’t contribute to retirement. I’m like, no, no, no, no, no. Let’s back up. You actually have it better. And depending on how your legal structure set up, that can actually be like a hundred percent deduction for your business. So you’re lowering your taxes to know that. Just to be clear, that’s not across the board because there’s all these pieces that come into play. But just think if you, I don’t know how to 100,000 in profit and then you subtract 57 and then, so you’re paying taxes not on the 100,000 anymore, you’re paying taxes like as the business owner in the business on afforded, wait, yeah. 43. Yeah, that’s pretty great. And you just saved a huge amount for your retirement, right? Yeah. Yeah. So if you’re interested, I’d say talk to a financial planner or come talk to you about it. But yeah, but there’s a lot, I will say what is confusing is there’s a lot of pieces that have to be taken into consideration when you start talking about retirement or individual retirement stuff.
Leah Gervais: Right, right. Wow. Well you are just a wealth of knowledge. I always am so inspired talking to you. I nerd out about numbers too. So we’re like always speaking my language. But I think what I love about it as we’ve kind of said throughout this all is how, watch how much of a position of power you’re able to put your, your clients in and entrepreneurs in, um, through this work. And I just think that that’s amazing and it really, you know, on a bigger level brings back so many of our wise I started and I know a big for me as an entrepreneur is having the flexibility to spend time with my very soon to be husband, which is insane, you know, to, to play at our family and our future the way we want and back to has to do with everything you’re talking about here. So it can feel really fun to work for yourself and have, you know, an independent or location independent business. But if you’re not putting in the actual structure to foster those bigger picture goals, you’re kind of missing a piece of the puzzle. So this is -yeah, me about it and I love it. Oh, thank you. It’s been so fun talking to you as always.
Leah Gervais: I know, I was always, I love chatting with you. I have a few lightning round questions for you. Are you ready? All right. What do you, what’s your go to as a business owner when you’re having a bad day or stuff? Just goes totally [inaudible]
Erin Armstrong: I lay on my acupuncture mat and um, yeah, sometimes I listen to guided meditation, but sometimes I just lay there at my acupuncture mat. That’s enough to like reset.
Leah Gervais: Love that. Cool. What are you most proud of in your career so far?
Erin Armstrong: I think that I’ve done it my way. Uh, you know, I’ve, I’ve had some challenges over the years figuring out exactly how to make what I want to do, work and, and I think that’s true for anyone in business, but when you, when you finally get there, it just feels wonderful.
Leah Gervais: Yeah. It’s all paid off. And do you have an inspirational or go to podcast or book regarding business?
Erin Armstrong: Oh, that’s, that’s a good one. Um, it’s okay if not, you know, I think I’m not going to give an answer because there’s so many, you know, there’s not one guiding light to me, although I love, I love listening and reading to new things, but, but yeah, there’s not one that just seems to me. Yeah,
Leah Gervais: I love that. Awesome. All right, well I know you have, the way I got first got in touch with you is that you have an amazing checklist of tax deductions for self-employed entrepreneurs or even for people that are side hustling but have their own business. So if you want to share with us.
Erin Armstrong: Yeah, sure. So that’s ErinArmstrong.com/tax/deductions-checklists.
Leah Gervais: Fabulous. And we will put that in the show notes. And what about social media? Where else can people find out about you?
Erin Armstrong: Um, I’m most active on Instagram, so if you just look for Erin Armstrong, I’ll pop up there. Um, yeah.
Leah Gervais: Awesome. Well, thank you so much Erin. This was hugely inspirational and helpful and you’re just the best.
Erin Armstrong: Thanks. Oh, thank you Leah. It’s been so fun talking to you and I’m really honored to get to be on your podcast.
Leah Gervais: It’s my pleasure. Alright. Visionaries, I hope you found this as helpful as I did. I hope that you have some sort of action piece you can take away from this, that whether that’s you’re going to get QuickBooks or you’re going to measure your desk at home and you’re going to deduct it from your taxes or whatever it is. Um, you know, all of this is great to learn, but better to apply. So I have faith that this will help in fostering your biggest vision. We will talk to you soon. Thank you all so much.
Your Biggest Vision’s Daily Checklist for Visionaries;