What are the biggest mistakes an independent contractor can make? How important is it to file quarterly? What can you do to get on the same “money page” as your partner? 1099’s… there are so many, what do I do with all of them? THIS episode is all of your money questions… ANSWERED! Thanks to my very special guest, Julia Grubbs, Dancer, Aerialist, Personal Trainer, and CPA!
Find Julia HERE: Juliagrubbs.com and on IG @jwgrubbs
Money March Worksheets: https://www.thedanawilson.com/product/money-march-worksheet-bundle
The Money Book by Joseph D’agnese and Denise Kiernan: https://amzn.to/3spNgol
Intro: This is words that move me, the podcast where movers and shakers, like you get the information and inspiration. You need to navigate your creative career with clarity and confidence. I am your host master mover, Dana Wilson. And if you’re someone that loves to learn, laugh and is looking to rewrite the starving artist story, then sit tight, but don’t stop moving because you’re in the right place.
Dana: Hello, Hello, my friend. I’m Dana. This is words that move me. Welcome. I’m really jazzed about this episode as usual, always jazzed about the episodes. Um, but today is special because we are rounding out Money March with a really special question and answer episode. Uh, today I will be joined by the lovely Julia Grubbs, who is not only a dancer and aerialist and personal trainer, but she is also a CPA super bonus points to you. If you know or remember from the vocab in episode is 63. What does CPA stand for? Yes, you are right. CPA stands for certified public accountant. So for the next almost hour, Julia CPA, and I will be answering the money questions that listeners have submitted over the last like three or fourish weeks, um, during the course of money March, but first let’s celebrate some wins. We’ve got massive wins around here. And, uh, the one that I would like to celebrate today, I can’t even get it out without laughing. I am celebrating that. I have finally, I’ve been wanting to do this for like years. My friends, I have finally enrolled in clown school. Yes, the clown school to be exact. The Clown School was based here in Los Angeles, but they have an online program, which I should mention right out the gate. This is not a paid promotion. In fact, I have not even started yet. So I don’t know if this course is any good at all, but it came recommended to me from people that I think are funny and talented. So that was good enough for me. I’m jazzed about beginning, um, and that in this week, and now I’ll pass it off to you. What is going well in your world?
I’m jazzed for you. So stoked. Please keep winning. You’ve got this. Okay. Now, before we get into this conversation with Julia, I want to let you know that my team and I have put together a special PDF companion for all Money March episodes. Actually we do PDF, um, companion, like interactive worksheets for every single words that move me episode. They’re all available in bundles of ten at thedanawilson.com/shop But we put the four money March episodes together in their own little bundle, because we really think that this information is important. And specifically these last four episodes are doubly useful. If you have that reference point that actual, you know, digital or tangible, I guess if you print it out place where you get to actually learn these things, instead of simply listen to these things. So, um, that special money March bundle of PDF worksheets is available to you thedanawilson.com/shop And, um, now we’re going to talk about that, that sensation, that you’re feeling in your chest right now, and the kind of tickling that’s happening in between your ears, that my friends is the desire to learn about money. Yes. So let’s get into it right away. Grab your pen, grab a paper, grab your words that move me worksheet or grab QuickBooks. I dunno, grab chalk and a sidewalk for all I care, but you definitely will want to be taking some notes. Um, all right. Without any further ado, everybody enjoy your money questions answered with Julia Grubbs.
Dana: Ladies and gentlemen, welcome my guest today, Ms. Julia Grubbs Julia Hi, thank you so much for being here. I’m really excited about this episode. I’m very grateful to have you thank you so much for making yourself available.
Julia: Thank you so much for having me. I’m so happy to be here.
Dana: Yeah. Um, okay. So this is how it works on the podcast for better or for worse all of, for better. Is that how you say it for better or for worse? Not for better or for worst, but for better or for worse? I have all of my guests introduce themselves. Now you are a woman that wears many hats. So this might be an interesting challenge for you, but, uh, let us have it. What, what would you like us to know about you?
Julia: Yeah, I know you do this, so I’m just a little bit prepared, but not over-prepared. Um, my name is Julia Grubbs. I am from Paducah, Kentucky, um, small town. I live in New York City. I am a dancer and aerialist, a personal trainer and a writer, but most importantly, I am a CPA or a certified public accountant, which I know have told your listeners.
Dana: Absolutely Indeed. Um, I’m thrilled that that combination of titles exists in one person because it would be very difficult to organize the schedules of all five of those people to have a podcast episode about money and finance for dancers. So I’m thrilled about you and your skillset. Um, and I’m really excited to be asking you some questions that I have garnered from my listeners over the last, uh, three weeks or so of podcast episodes that were specifically focused on dancers, choreographers, the way that we earned money, the amount of money that we earn and what we do with that money. So I’ve got a boatload of Qs to A and I’m thrilled that I don’t have to do it by myself. Um, so I suppose we might just get into it, shall we?
Yeah, why not? Okay.
I think you’re probably better suited to answer this question than I am. Um, because I know that you work with a lot of small businesses. You work with people who are, self-employed the question coming from listeners is what is the biggest mistake that an independent contractor can make?
Honestly, I think it’s just not being prepared for tax time or just with a general plan for your money at all. Right. So often as dancers, we have money coming in sometimes, but not other times, um, irregularly from a lot of different sources. So really just having a plan and an approach to what you’re going to do with that money when it does come in, uh, making sure that some is set aside for taxes, some set aside for bills, you know, general emergencies, um, you know, for all of our expenses that we have, as well as making sure that there’s fun money in there as well, but just having an approach to it, instead of saying, great, I got $2,000, what do I do with it? Right. We want to make sure we have an approach.
Um, do, do you mind if I ask what is your personal approach?
Sure. So, um, I am a full-time employee as, uh, as an accountant, as a CPA. Um, so I do have regular money coming in, but as for my dance income, you know, there’s a couple of different approaches you can have, there’s a 50, 30, 20 rule sometimes that people have or a one number approach. So the 50, 30, 20 is what you would say 50% is going to our fixed expenses, you know, 30% for fun. And then 20% is going to what I would call future you. Right? You’re saving, you’re investing. Um, so that works well for some people. And they’ll kind of do that on a monthly approach. Um, the one number approach is a little bit different. It makes it easier because it’s just one number that you have to remember. Um, so the idea is to calculate, you know, how much money you can afford to spend on flexible costs, right? The things that we have to actually make decisions about, not our rent that’s kind of fixed. Um, and then you only have to remember that one number on a date day basis. So you can start with your total take home pay that you expect to earn during the month. Right. We know that can be different as dancers, but you’re going to subtract all your monthly fixed costs, things that we know that, um, have to go, you’re going to set aside the money for future you and then, um, money for your non monthly expenses. You know, Christmas gifts, things kind of like that. And the money leftover is your flexible spending money. So you’re going to divide that number by 4.3, it’s the average number of weeks in a month. Um, and that’s your one number. So then you can go out into the world and spend money on things, you know, as you do. And all you have to do is check and make sure you haven’t hit your one number for the week. Right? So that’s, um, a good approach that some people like to use.
I love that approach that is different than my approach. Um, I talked a little bit about, um, a dancer and a dancer spending in, uh, two episodes ago now. So I think episode 63, and I got this incredible gift of a book called the money book for freelancers, independent contractors and the self-employed and they, they talk about the divine trilogy of savings accounts. So I made a habit of 10% going to an emergency fund and by 10%, I mean of every check and that’s even my residual checks that are for like $2 and 74 cents, 10% goes to emergency fund, 10% goes to retirement fund and then 15% goes to a tax fund. Um, and by fund, I actually just mean online savings account that has a pretty healthy interest yield. So, um, I made habit of that way back in 2016, it is absolutely what I do once all that money is done. And once my, um, monthly fixed expenses are paid, everything else is freedom money. And what I find is usually, um, I feel best about putting that freedom money also into one of those savings accounts versus leaving it in the checking account where earns 0.01% interest, which is the biggest buzzkill ever. Um, so that’s sort of my game plan, but I like this one number. It seems like less math and I know for most dance types, math, isn’t our favorite thing. So maybe less math is more good. Um, thank you for shining light on those couple of options. Um, okay. So our next question, I love this question when negotiating contracts, what are the phrases to avoid? What’s the best thing to bring up an ask? What are the best questions to ask, um, in terms of a negotiation and I might head this one up, um, I’ll speak specifically to dancers and choreographers because that is the world of negotiating that I know. And actually in full honesty, I have had a dance agent for 15 years. I have never had to negotiate the terms of my own contract. Um,
But every year my general service agreements with my agent comes up for renegotiation. Most GSS or general service agreements are for the term of one year. And I think it’s an important thing to note, that’s the contract that dancers will sign most often. It’s a GSA, it’s a general service agreement of some sort. You’re usually you have one with your agent, you have one with a manager, you might sign a GSA for a particular job. That’s addressing some sort of agreement for usage or something, but we, we, the dancer don’t sign the SAG-AFTRA contract, you know, or we don’t stipulate the terms of every working agreement that we’re on. We we’re, we’re not writing that language. Those contracts already exists. Our agents sign them on our behalf, or we will sign paperwork on the day. Um, but the, the contract that you’ll wind up signing probably the most often outside of paperwork that says, yes, I work these hours, um, is the GSA and what I would love to, um, underline for this, for the person asking this question, and for everybody listening is that general service agreements are standardized, right? That’s why they’re called general, but that doesn’t mean that they can’t be adjusted or modified or changed in some way. Um, you absolutely have the rights and the ability to suggest and offer changes to that GSA. And I’ve, I’ve never made amendment to a GSA that wasn’t accepted. Or every time I resigned my GSA with my agency, they send me a copy. I Mark it up in red. I send it back. I say, is this okay? They say, yep. And we sign. And in one more year, we do it again. Um, there was an awesome course offered by SAG-AFTRA. I think it was called understanding your GSA. And it’s one of the many perks of being a union member. You get to take this free course. And I learned all the jargon, Oh, sorry, circling back. Um, the question asks for what are some phrases or things to look out for things to avoid in perpetuity? My friend in perpetuity means forever for all time. I really encourage, anytime you see the word in perpetuity forever, you ask if that’s, um, uh, yeah, that’s a point where you might be able to set a term instead of in perpetuity forever. It’s for the next five years. It’s for the next 10 years. It’s until the usage changes, at which point we renegotiate strongly recommend looking out for that language in perpetuity forever. Um, but yeah, these, the, the terms of contracts are important. In other words, the amount of time that they cover, um, always make sure that you’re filling in all blanks. You don’t want to sign your name on something that has open blanks that other could fill in numbers that you didn’t necessarily agree with. Um, on GSAs specifically, that will usually be a percentage number or, um, a length of time. You definitely want to make sure that you don’t leave any, any important fields like that open. Um, and then I guess my, my only other encouraging factor would be simply to ask if you don’t understand language it’s I know it might feel embarrassing to not understand what a word means or what it means in this specific context, but contracts are not designed with dancers in mind. Most of the time, there is no shame in asking for the meaning or a breakdown of legal ease of this jargon that can sometimes be intentionally confusing. So I really encourage you ask questions, either asking to your agents or from production, just for a little additional clarity. Hey, what does this mean? Um, and then of course there’s the good old fashioned habit of take a photo, take pictures of all of the things that you sign, um, and then put them someplace on an encrypted hard drive. Uh, but I, I, I see it happen often for myself and for others, is that something might come up long after the job has happened. You don’t remember what you earned. You don’t remember the hours that you worked. There is some sort of discrepancy and you have to call on that information. So, uh, yeah, that was, uh, a long way of wrapping up that question. Um, when you’re negotiating contracts, the phrases and terms that I would look out for are the length, the term of the contract. Um, some specific language in there, for example, in your, GSAs your general service agreement with your agent. They’ll usually say I Dana Wilson here by give, enter name of agent or agency permission to act as my __ words come after that. You just want to make sure that those words are agent not, not necessarily representative legal, anything. This is I’m looking for an agent. That’s what I want to make sure that the word that follows there is, you know, the actual word that you’re looking for. Um, so there’s that, what else today? I think I covered that whole question. Best thing to bring up is anything that you don’t understand always. Okay. I think I did it. Julia, do you have anything that you would add to that?
Um, sure. You know, uh, you know, contract negotiation, I won’t say is my entire specialty, but I will say, especially in New York, I know I’m not sure as much about LA, um, but some might not realize that agents will be happy to represent you on a particular deal, even if they don’t represent you generally. So especially if that deal and you know, is a union job or a job that pays well. Um, but regardless of who represents you, you know, one clause that possible to negotiate is the so-called favored nations clause. So basically that ensures that a performer is paid the same as others on the show. Um, so, you know, say you’re doing a certain show and you’re on in the ensemble, and we’ll just to make sure that all the other ensembles, what, whoever negotiates basically the highest, if this is great for an unrepresented actor or dancer, um, that whoever maybe might represented, negotiates the higher rate that you get this same pay as they do. And then you can negotiate that in terms of salary or in terms of terms and conditions, um, all sorts of things,
Definitely important to bring up that the, the concept of favored nations certainly can work to your favor as you’re an up and comer. Um, but if you’re a person who’s used to negotiating above scale or has a specific day rate for yourself made by yourself, based on your experience and skillset, that’s, you know, above average, then looking at favored nations language is, is not going to be such a friendly thing to, to, to behold. And of course there is always room for a conversation. I think that all too often dancers and creative types in general, except what’s on the page as like I have to say yes or no, there is a third option, which is, I can say yes if or yes, when, and then go from there. Um, Oh man. Oh man. And I think in addition to having a bounce board for my ideas, my feelings about work, you know, my calendar in general, I love having an agent because of that, because I do not like being the person that negotiates, I like being the person that dances and teaches and moves and choreograph. So, um, yeah, I think that a handful of a lot of the questions that I got were, um, coming from a place of a dancer or choreographer who is not yet represented, I cannot stress enough the value of that relationship. And, um, I know right now, specifically, right now being March of 2021, a lot of agencies, uh, that represent all sorts of talent are doing virtual submissions, not a lot of people holding auditions in person these days. So it might be a really awesome time, even if you’re not living in a big city or hub to get the attention of some of these people who are sitting at their computer all day long, looking for new talent in, in, under rocks that might not have been lifted up before. So if you’re out there looking for representation, don’t be shy. Come forward. The world is ready for talent
And thousand percent.
Okay. Uh, let’s keep it pushing. The next one is interesting. I have an idea about this and I would love to hear your thoughts. My listener asks, what are the practices or tips or tools that you would recommend for getting you and your partner on the same page with money? Um, having two incomes in one household, in other words, and I’m fascinated by this, my husband and I have been married for, uh, five years, almost six years. And
Thank you so much. We root that is a win, especially because I am so in love. Um, and especially, especially because I haven’t like left in over a year, we’ve been in a house together for over a year and I am still smitten. Um, so I’ll, I have a couple of them. I jotted down a couple of the things that we do that work. And I’m not saying by any means that I am a professional at this. Um, but one of the things that my husband and I have adopted and I see tremendous value in is that we treat our goals, financial and otherwise like a business. And we treat parts of our relationship, like a business. We have a weekly meeting where we sit down and talk about the nuts and bolts of it. Right. Um, and I think it helps to build trust. We talk about financial goals. We talk about updates in our financial lives. We check on accountability. Like, did you send our CPA this? Or was I supposed to do this? Or did you pay this? Or, you know, it, it really helps keep clear who’s in charge of what, um, and what’s been done and what is yet to be done. Um, uh, yeah, that, that is one thing I really am a huge proponents of is the weekly meeting that’s set. It doesn’t happen over the dinner table. It happens over Skype. He and I are both in separate places. It’s standing on the calendar. If we cannot make it, it gets rescheduled. Like this is kind of coveted time. Um, the other thing that we do at least once a year is we really put it all out there, look at every single account, how much is in it, how much was in it, how much do we want to have in it? And we, I have a Floor to ceiling mirror in my dance studio area. We get a dry erase marker and cover that thing with just all the numbers really helps build trust and get a clear idea of the big financial picture instead of what comes up in our weekly meetings, which is usually kind of, kind of short term. So that’s, that’s another one. Um, and then in terms of like the actual structure of our money, I don’t know much about this, but my husband and I have a, um, yours, mine, ours approach. He has his money that he earns and he uses, I have my money that I earn and I use it and we have really different spending styles. Um, but we then have an account that is ours. It’s for our goals, our trips, our dream purchases, our, you know, shared items and emergency things. And that sort of like the, I guess it’s not a divine trilogy anymore. Cause I have, I have, I have taxes, emergency retirement. And then DanDana, which is our joint account. And every check I get, some of it gets shaved off and put in there and that, and when you have two people doing that, that account grows pretty quickly so that I would super recommend. Um, and then, Oh, one more thing, celebrate, celebrate the small things and celebrations don’t have to be expensive. I think what my husband and I have started to do is establish what we what’s important to us. Um, since the quarantine actually a cool change is that we found out that neither is not important to either one of us to eat out. Um, I much prefer his cooking to most of the restaurants in my area and I prefer efficiency speed. And I love like I love not spending more money than I need to be spending. I found this awesome farmer’s market. I get a box for 25 bucks every single week. I know that’s become a definite fixed number for me. And when I find myself spending the same amount on one meal than I do on my entire weekly food, I’m just like, Ooh, I don’t love that feeling. So we’ve decided like certain things are not important, eating out for example, but certain things are for me, one of them is travel. So I am willing to save scrupulously in other areas so that I can spend in the areas that really light me up. My husband’s the same. He’s like I do not need new clothing ever. He will wear his clothing until it does not cover his body anymore, but he will absolutely be buying new tools, new equipment. And my husband is an engineer. His tools and equipment are not like the cost of a new pair of shoes in my world. Those are my tools, my equipment, right? These are like thousands of dollars of, you know, machinery and stuff. So we save where it matters and we spend where it matters and we celebrate meeting our goals. That is my advice for the couplage in the world. And, and Hey, five years, um, I’m celebrating, I’m celebrating, but it’s not 60. I mean, get out there and ask that question to every couple that, you know, that’s such a smart question. And I’m, I’m really curious. Um, Julia, I’m curious to hear your input, but I would pose that to any couple that’s listening. Like what do you do? I want to know, send me a DM. Words That Move Me podcasts, holler, Julia throwing it to you.
Yeah, absolutely. I mean, as much as people say dancers might be frivolous. The system that you just described was so detailed and you know, you’re making that systems based approach that everyone needs to have success and this area of our life, right. As dancers, we know how to hustle. We are hustlers like no one else, but in our financial world, you know, sometimes we don’t do that, but you are showing that we can. We do have the skills to be able to do it. We just have to apply that same kind of energy we have in the rest of our lives. Right. Um, yeah. So, you know, the weekly check-ins, those are amazing, you know, a yearly check in. I would answer these questions for yourself. I would say on a scale of one to 10, you know, how much, how much you worry about money or how much, how often do you think about, or talk about money? Um, and then you want to take a forward-looking approach and say, what does our most amazing life look like? Right. Let’s see each person answers that individually. And then we’re going to come together and see, okay, what do we want our life to look like? Right. Um, where do you want to be in 5, 10, 15, 20 years. And once we settle on what we want, then we want to take a systems based approach of how to get there, right? Automatic saving, investing, right? Like you’re talking about automatic debt payments. If we are in debt, know our exact debt payoff date the year and the month, so that we can have a date to look forward to and then use all of those skills that we are all of those systems that we’ve built to get us to our most amazing life in the future. Right. What do we love spending money on? What do you hate spending money on? We’re going to cut costs, mercilessly on those things that we don’t really care about and spend a ton of money on the things that we love spending money on. Right. That’s going to make us a generally happier person, happier couple in general. Right? And we, each person in that relationship might have different answers to that. And so they can then just act accordingly, right? I like spending money on convenience, having my groceries delivered to my door. I love cooking. So I don’t eat out as much, but I just love having all of my groceries delivered, you know, having a personal trainer, I could, um, create my own workouts. Right. But I outsource it to someone who also trains dancers and does that for me. Um, so we work to find out what we actually care about and not what other people care about, right. What our person and our relationship cares about.
That’s huge. Um, I love this idea of forward thinking and then kind of reverse engineering back from that point. Like I know that if I want to be fully debt-free by X date, then I want to be half debt-free in half of that time. And it can get pretty practical and reasonable and drama free when you just look at the numbers and really focus to hit your marks. Um, okay. Now let’s actually, let’s sidestep from the math of it, the, the math part, and just talk a little bit about mindset or what I like to call drama. Um, and, and it’s funny because money, which is math has such a hold on our heartstrings on our thoughts on our, on, Ooh, it’s deep. It is very deep. So I, I would like to talk a little bit about mindset and I know that you, um, specialize in this department. So I can’t wait to hear your thoughts. Uh, I have a listener asking what is the suggested mindset for an artist who’s looking to increase their earnings and kind of achieve a more sustainable minimum. Um, and I think the caveat here is like, while still doing fulfilling work, what do you think about that? A money mindset? What’s the, what’s the mind, what’s the type of thinking that will get you earning more without necessarily having to sell your soul to the devil?
Well, I, I think you can’t really address the problems with money until you address the psychology behind money. Right. So what is your money mindset that you had growing up? What did people in your household talk about? Right. Did they not talk about it at all? You know, I always felt like I had somewhat of a scarcity mindset and that there would never be enough. So it might help to start to journal and, you know, unravel well, why you might have that certain mindset and tap into that emotion and that it makes you feel and combat it by saying I’m not a child anymore. You know, I don’t have my parents’ fears. I don’t have, I don’t need to bend to that fear anymore. And I am in control of my current money beliefs. But in order, in terms of, um, increasing your earnings, you know, I often think about how happy future me will be if I am not worried about money, right? Money is people’s top sources of stress. 73% of people said that they, if they felt clear about money, then they would report being less stressed. So if I feel less stressed about having everything covered for me currently, and for future me, then I can focus my time and my energy on things that do artistically fulfill me.
That’s huge. So in other words, You’re taking on now, which something that might be maybe just an uncomfortable conversation, right? Like something as simple as asking for a raise or something as uncomfortable as asking for what you actually think you’re worth versus giving the homie deal to everybody right. In the moment that might be uncomfortable, but your future self will thank you because your future self will be that much less burdened by, uh, a scarcity mindset or a money struggle moment.
Yeah. And going back to that, um, that what we talked about with couples, you know, we, that forward thinking approach, what does my most amazing life look like? Let me backtrack and how can I get there? Okay. I need to make more money in order to get to that. Cool. I’ll start doing that now. Right? It’s all about consistency over time, as opposed to just, you know, one, one thing right now, I’m going to increase one paycheck that I earn right. We’re looking to do it over a long period of time so that we’re successful successfully set up financially.
Yeah. Small bits, making big difference. This idea of like compounding interest over time, a small change. Even if you ask, you know, let’s say you’re a dance teacher and you ask for $5 more per hour, small change in this one conversation that we’re making. But over time, a really, really big, a big shift. That’s huge. I appreciate that. Um, another listener asks, uh, I feel very motivated to work on projects that fulfill me artistically, but I’m less motivated to work on the sufficient income type of projects. And that might even fully mean a day job. What do you think about that dancers taking on a day job outside of, um, their, their creative work? Is this something you see with clients often?
Absolutely. Yes. I think some people have, especially right now during this past year, I think people are spending their energies developing side businesses, side hustles, as well as just, you know, um, nannying part-time things, um, in order to kind of cover those bills.
And is that something that you, um, I guess the followup to this is like, is that something you encouraged, do you see, do you see creative clients of yours achieving some degree of financial freedom, thanks to say Starbucks or, you know, having, having some other regular income?
Yeah. I think it depends on what your goals are. So, you know, my goals are flexibility so that I can go to any audition I want to go to. It’s not limited by time because I can work on my own whenever I want. Right. Others might have to work the morning shift at a gym and so that they can go to an audition later, um, or work on contracts later. Uh, I think it depends on the person and what they’re willing to do. You know, um, oftentimes there’s kind of a negative stereotype. I think between a lot of people would come to the city and bartend and then not be able to wake up for their 8:00 AM audition cause they were bartending till 3:00 AM. Um, and if that’s, if that starts to take away from what they actually want to do, then it might be time to invest, uh, their skills that they, they definitely have into a different side hustle.
Awesome. Thank you for making that distinction. I worked at urban Outfitters when I first moved to Los Angeles and for a full calendar year, I rocked that opening shift from 6:00 AM to 3PM and that, and that worked for me. I was a person that thought like talk about money beliefs. I believed that that stability helped me in my life. I believe that like the regimen, the order, the, uh, certainly the health and the health insurance that I was provided, all my taxes were automatically taken out of my check. I found, I found great convenience and comfort in that it didn’t bother me at all. And so I think the combination of the job itself, which provided a little bit of flexibility and hours, that didn’t really conflict, that mixed with thoughts about it made that a totally reasonable thing for me to do at 18 years old, living on my own for the first time in my life, you know, but there, but that, but that’s not everybody’s experience. This is not a one size fits all fits all type of answer. You have to really get, get real with yourself about what you’re thinking this side hustle means to you. Um, because there are ways that it can fill your cup emotionally and financially. Um, if it’s the right gig, man, I, I really enjoyed my Urban Outfitters gig. I’ll tell you what it made shopping for my audition outfits, much easier and more fun, and cheaper I soaked that employee discount up for as long as I possibly could. Um, okay. So maybe the side hustle conversation is a good segue to my next question, which is one of my favorites. It goes like this, I love it so much. 1099, How do I deal with all of them? And I have this exact same question.
Yeah. I mean, a ton of, uh, dancers will come to me and say, Oh my gosh, I have so many, 1099 nines. My taxes are going to be so difficult. And my answer kind of is that doesn’t necessarily mean your taxes are going to be that difficult. I will say. Um, all it is is basically a couple of extra data entry, you know, in order to get all of that uploaded into the system. Now, if they are in different States, which often happens, you know, if they’re working in different regional theaters across the country, those kinds of things that can make it a little bit more difficult and we can get into that a bit later, but basically 1099. And I know California also has AB5 that makes independent contractor versus employee. Um, yeah, I know we don’t, we don’t, we don’t love it, but, um, if you are getting 1099, then that means that employer not the right word, but, um, considers you self-employed. So when you are self-employed you then will file a schedule C and then you conduct deduct business expenses against that. Right. So you’ll then pay self-employment tax on that the, which is the employer and the employee share of social security and Medicare. Um, but half of that is deductible. So basically all the 1099
Back up, back up, back up. Yep. So half of Medicare and self-employment tax are deductible
On the front half of the 1040, well, the 1040 is now just kind of technically one page, but yes,
I’m just underlining that for everybody that’s listening because that’s very important. Carry on.
Yeah. So yeah. So if your income is all W2, um, then you won’t file as self-employed and then you don’t get to deduct business expenses against that. The only way you can is on the state return, if those, if that state allows it. So I think New York, California, Pennsylvania, and a few others have a combinations that still allow showbiz expenses. Um, but not all States do. Okay.
Here’s a question from me specifically about this subject on a normal year. I might, I do a combination of W2 and 1099 work. Let’s say I teach at four different summer intensives. I go set choreography on a couple of different studios. I am in a couple TV episodes and I teach on a convention. So a mixed bag, right? And while I’m working during the year, I’m not thinking about which ones of those will be W2’s and which ones of those will be 1099 nines. So I find myself at the end of the year, wondering if I have all my documents ready to give to my CPA, I, it never fails. I will send all my tax documents to my CPA. And then two weeks later, I get three more from this dance studio or this project or whatever. Um, do you have a system, a recommendation for tracking projects as you do them that helps you kind of line item yourself and, and know when you’re ready to be like when you’re done at the end of the year, um, or when it is tax time, how do you know that you’ve got it all?
Alright. So the deadline for the, um, employer to send those documents to you is January 31st. Um, so technically they should mail those all to you as of that date, right? That’s when they have to submit it to the IRS. And technically, technically, if they have paid you more than $600 for each project, then you will, are supposed to get a 1099. W2, any amount of money that they pay you. Um,
Question for clarity, $600 per project, or $600 total. Let’s say, let’s say I go to a studio two times in a year. Is this per visit or is this in total?
In total for the year.
So they have to send something by January 31st. And if they’ve paid me more than $600, they have to send me a certain thing. And then what happens?
Yeah. So that is the 1099, um, which they have also sent to the IRS. So if you get a 1099, that means that he’s also sent that to the IRS.
Okay. So they told the IRS, Hey, I, I paid Dana this much money. And then if Dana doesn’t report receiving this much money from them, then the IRS goes warning warning, look closer, which we don’t love that. Right. Um, so that’s why it’s important to make sure that you are reporting all income as what it was, right. Be it W2 or 1099, or, um, even interest earnings and stuff like that. Correct. Okay. So to answer this person’s question. 1099 nines, how do I deal with all of them? I personally scan them all into one document. I call it 1099s, and then I send it to my CPA. But what if this person is doing their own taxes?
Uh, so whatever, however, they decide to file. So if you do make under 72,000, anyone can file for free on the IRS website. Um, and some States allow that as well, Free File. Yes. And then there’s a couple different softwares. I believe that you can choose to do that. So if you are doing that, basically, like I just said, it’s going to be just a little bit more data entry. Each 1099, you have to enter in the EIN how much money was received, those kinds of things. And also it was new for this year. We got 1099 NECS instead of 1099 miscellaneous. I don’t know if anybody noticed that this year, but yes, that was different. I didn’t know.
I did I noticed that this year and I didn’t know what it meant.
Yeah. So NEC non-employee compensation
Look how much learning I’m doing! Thank you for that. Okay, cool. Um, let’s move forward. Our next question is, do dancers get paid royalties? This is a great example of there. Isn’t a yes or a no. Um, if we look really broadly, I could show you many dancers that do get paid royalties. I could show you many dancers that don’t the distinguishing factor is the type of work they’re doing and the type of contracts they are on strongly recommend taking a wander back to in the show notes to episode 63, which is the first it’s part, one of Money March. I do talk about residual structures and SAG-AFTRA contracts. Those are, uh, dancers appearing on film or television and a new media. Um, many of those contracts do, uh, include residual structures and we love that. Um, right. Yeah. So answer to that question is Yes, and if you’re doing that type of work, um, and next question, how, and when do I negotiate pay? Again, this more or less depends on the type of work that you are doing because I have an agent, my agent is always the one that negotiates my pay and, um, I, I always seek for that to be done before my first day of work. You want to know what you’re making before you’re on the job. Simple as that, I am making it part of my money practice to talk about money first and frequent. If the terms of the project change while it’s happening, we’re going to talk about money again, before I signed the dotted line, we’re going to talk about money first and frequent is when, uh, you should be discussing your money. That’s my, that’s my answer. Anything to add to it?
No, that’s, that’s got it covered. You know, we have to make sure that this is, it is a big part of our lives, right? So we have to make sure that it is in the conversation, um, frequently, as you said.
Which actually also helps it, it becomes less of a big deal when you’re talking about it more often. It’s yeah. It’s, I guess it’s kind of like fouette turns in that way. Like it used to be a really, really big deal before I knew how to do them. And when I didn’t do them very often, it was like, Oh, here we go. We’ll go. And then when I learned how to do them and did them all THE TIME, unstoppable, you could not keep me from doing four to turns in my kitchen. I will be doing for tutorings everywhere. Video coming soon.
Do you do them now?
Um, it’s been a long time since a fouetté turn, but I bet I could still, I could still hit a footy turn right now for sure. Um, okay. Julia, talk to me about IRAs. I’ve gotten a lot of mixed information about which type I should have, um, be it a Roth or a CEP. Um, I I’ve gotten overwhelmed with this question and my, my dives on the internet of trying to find a simple answer were not so simple. Um, so I’d love to hear from a dancer, what, what you recommend for obviously everybody is different, but what would you recommend for the average dancer when you take it out? At which point tax rates might be much higher because you know, people say, what goes up, must come down. I have noticed that it’s not entirely true. Uh, I have not seen taxes actually go down. Have I, I don’t know, honestly, I don’t pay that much attention, but it’s an important thing to consider when you’re making that call. With a traditional IRA. Are you only able to withdraw funds and earnings from that account after you’re 65? Or is it a number of years from when you started it? What’s that? What does that timeline look?
Um, for traditional the withdrawal ages 59 and a half. Um, but there are, uh, ex exceptions, you know, if you’re buying a first-time home buyer, you can you can withdraw up to $10,000, um, for a home purchase and you don’t have to pay tax or penalty on that. Okay.
Oh, that’s important. First time only asks the woman that owns her condo. Okay.
Now, if it’s not a residence, you know, and you’ll maybe own property that you don’t live in there, you know, you have to look into that a little bit, but if it’s your first full time residence, then, then you can do that.
Cool. Awesome. Thank you for that. Okay. Um, a couple of questions now coming from me, I’m really curious about the, this is me just trying to, um, trying to get all the goods without having to do all of the work. I’m wondering what are the quick fix type questions that you get often? Like somebody comes to you with this big deal. They’re like, dude, this is so hard. I don’t understand, blah blah. And you’re like, actually it’s really easy. All you have to do is blah. Like what what’s that? I want to know the answer to that or those questions if there are more than one.
Yeah. I think as you said, sometimes it’s, it comes to be drama maybe. Um, but when it doesn’t have to be basically, uh, people say, Oh my gosh, I’m a dancer. And I have so many, 1099s. And so tax time is so hard and it’s stressful, right. Basically keep a spreadsheet and total it for your accountant. If you do that. Um, or, you know, if you’re going to do it, keep all your receipts and say, okay, how much did I spend on my website on, you know, um, any kind of marketing materials, headshots resumes, any of those kinds of things, um, and then just keep it all together. So that way, when it comes to tax time, you have everything that you’ve done, right? As soon as you bought classes, you might have all of receipt of all classes you paid for in one year, take that, put it into your spreadsheet, say, cool. This is how much I spent on classes this year. And the answer is done.
Could you give a rundown of, in your eyes, which are in, in your CPA dancer eyes, what are the categories that you, what are you, what are your itemized deduction categories? I remember struggling for years trying to decide what to call certain things. And I would call, let’s say, I called, um, apparel. Let’s say I called it a uniform one year. And then the next year I was calling it, um, maintenance and maintenance and upkeep or something like, I really, I got very confused about where to put what, because in this way I do think we are unusual, like me buying this new pair of sneakers is not for vanity it’s because I danced holes in my other pair of sneakers and I danced in sneakers. So that isn’t, you know, I, if you could just take us through a gentle walkthrough of like the big categories and examples of what might go in each category of deductible expense.
Sure. Um, yeah, so these aren’t the itemized deductions, but these are on the schedule C when we deduct, um, our business expenses, right. As a self-employed individual, um, anything from advertising. So I would say website, uh, headshot, resumes, you know, anything that goes in there, um, you have a decent amount of leeway, um, in that other deductions category at the bottom to put something and then just call it that, that year. And then when you go to do your taxes the next year, right. You can just move it on over, you know, you just keep it simple year to year. Right. And so if you have that say Google sheets spreadsheet that says, okay, this is where I put everything last year. Cool. Move it over and just do it the same thing this year. Um, but yeah, those things advertising, marketing, you’ve got your, um, auto expenses, you know, if you’re driving those kinds of things or travel in other respects, um, yep. There is repair and maintenance as well. Uh, professional fees, um,
Like your, like your union dues, things like that. Where would you put bodywork massage, physio, acupuncture, meeting with a dietician.
Yeah. I would stick it in that other detections category, um, other, the, you know, health and wellness, that kind of thing. And just put it under all of those.
Okay. I have a feeling our listeners will want to be knowing a lot more about a lot of this stuff. So don’t let me let you out of here without leaving a way that could find you and, and, and potentially work together. Um, okay. So the opposite side of that coin, like the easy fix question is what are the questions that you wish nobody ever asked? Because they’re so complicated and dense and difficult to answer. And will you answer those questions so that we so that we don’t have to ask them so that we don’t have to ask you individually?
I would say honestly, the biggest challenge, and it’s hard to answer without going into each individual person’s experience is each state, right? If you’re working in multiple States, each state has completely different laws and you’ll have to see if your state conforms to the federal laws. And that’s really a big deal right now with COVID and all the tax changes that are going along with that, you know, some States tax, all the income you earn, and then you get a credit for taxes received. Um, some States tax only income earned in that state. And or if it’s under a certain moment, it’s not, you don’t have to file. Um, you might have to file in multiple States. I know that’s a question that comes and can be difficult. I always had a file in Pennsylvania. And then the one year I thought it was not going to have to file in Pennsylvania. I had to file in Pennsylvania again, and I was just talking to filing that’s something.
Okay. So it’s that there is no, yes, there are rules and there are a lot of different rules and it’s okay to not know all of the rules. Um, but it’s not okay to break all of the rules. So you must find somebody who knows what the rules are or find a place to look things up. Um, I’m guessing that would just be the state.gov or
Yeah. The department of revenue usually. Um, you can find it on the department of revenue website for any state. Yeah.
Okay. My move, because I believe I am a unique and individual snowflake is to work with a CPA that understands unique and individual snowflakes. I have not tried to file my own taxes since I was probably 17 years old. I did it once. I cried so hard and I’m not going to lie. I still cry when it’s tax time, because I feel stupid when I don’t know how to do things or the answers to things. I had a little chuckle to myself when you were talking about, um, a Google sheet and like, just do it the same every year. I not only have a Google sheet now, but I have also a Google doc that reminds myself the answers to the questions that I always ask, which is like, where does the individual, or does my LLC pay for my health insurance? I have the answer to that. Cause I w I ask it every single year. Um, where do I put this? And I write the answer to that. So as you’re asking questions and getting answers to them because taxes are, Oh, I have another question for you. I was just about to say, because taxes only happen once a year. And then that made me look directly into your eyes, Julia, and ask, how important is it to file quarterly? Cause I’ve got my boxing gloves on. I don’t, I, if taxes are going to ruin my life, let it be once a year, not four times, I get really stressed out at this time of year, certainly because of the way I’m thinking about it, obviously, but I get really mixed information. Like it’s going to save you money. You should definitely file quarterly. And then all of a sudden when I don’t file quarterly, cause I’m like, you know what? I I’d rather pay more and worry about it less that I’m fine with this. But then I get to the end of the year and you’re like, why didn’t you pay quarterly? Now we have to pay penalties now, like talk to me quarterly WTF. What’s that?
It definitely just depends on, this is another one of those BS answers I’m going to give you depends on your situation and year per year. Right. So how much did you earn last year? How much tax did you pay last year? That’s going to affect, you know, um, estimated taxes this year. Um, as well as just, um, what was I going to say?
Filing quarterly? Should I do it? Should I not do it? What does it depend on? What is the answer to that question? Depending on, yeah.
You know, as well as just, um, how much 1099 income you’re getting, right. If you’re getting a bunch of taxes taken out from your W2’s, you might not have to worry about it as much as if you filled out, you know, that little spreadsheet that they give you at the beginning to say how much you want to deducted Right? So if you do have some W2 income and you can have more taken out of that, so that it covers, um, maybe some of your 1099 income, right? There’s a nice little worksheet that you can do on the IRS to see if you’re being withheld enough from the W2 income that you do have.
Oh, that’s exciting. Do you see how I just went from being like hot and sweaty and enrage to like genuinely curious and interested in something because you called it a worksheet. So I get excited. Um, okay, well, that’s, that will be added to my master document of questions answered. Although I don’t know that I will ever become a person that pays quarterly, unless I have to, like, if you tell me that I have to, I will definitely do it.
Not telling you that,
Oh, drats. I wish somebody weren’t somebody, you know what? My, my poor CPA might listen to this someday. And he’s like, Dana, literally, I am telling you that you have to.
Listen to him.
Uh, I don’t know what my deal is with that, but I’m working on it and becoming a person that is not like it. The world doesn’t come down on my actual head. I get a little grumpy when I have to pay taxes, but don’t wheel, I’m not unique in that way. We are all of,
And this year, just so we make that clear, the filing deadline has been extended this year until May 17th. So you don’t
By like, I’m. Well, I’m annoyed. Like we had a dumpster fire of a year. These are my thoughts. I’m getting so hot. I have to take my shirt off, not my, not my whole shirt, just my outer outer shirt, 2020 happened. Right. Nobody can deny that 2020 happened and we’re pushing our tax deadline back 30 days or like 32 days. I’m sorry. That does not seem sufficient to me, but I started early. I’m prepared. My CPA is also prepared. I’m going to be okay. You’re going to be okay if you don’t think you’re okay. Here is where you can find Julia Julia on your Mark. Get set, go. Where do we find you?
You can find me at Juliagrubbs.com Um, my, all my contact info is there. Um, I’m on Instagram @JWgrubbs. Um, two B’s. Um, yeah. So any of those you can there’s I have a contact form on my website. You can feel free to send me an email. I love answering questions, helping dancers, you know, feel better
Thank goodness for you. I appreciate that so much. Thank you for making yourself available to me today. Me and all my thoughts and feelings about money. And, uh, I, I do think I will be reaching back out with a few more followup questions. That is all I have for you today, but in, in my life as a curious dancer person, I’m sure you will be hearing from me again.
Absolutely. Can’t wait!
Thank you for coming. My friend. I’ll talk to you later. All right. My friend, I hope that you learned as much as I did, and I truly hope that you visit Julia with any other money or tax related questions that you have. I am certain that I will be. Um, so she won’t be shocked to hear from you lovely words that move me listener. Thank you so much again for being here. Um, just a few more things before you run off and go organize your 1099s. Um, I will be holding a free career coaching session via zoom coming up in April on Wednesday, April 14th. Now that time is TBD. So if you are not already following me on Instagram, I’m @Danadaners D A N A D A N E R S, or the podcast on Instagram, which is words that move me podcast. Um, all one word, no spaces or underscores or anything fancy like that. Um, but make sure you follow us over there because we will be blasting this information loud and proud free career coaching, a group call on zoom. It’s going to be awesome. I can’t wait to share what I’m all about. Um, tremendously valuable tools here that we’ll be sharing with you. Now go get out into the world, keep it organized, keep it financially free and flowing. And of course, by any means necessary. Keep it funky. I’ll talk to you later.