The following table describes my income and expenses for the month of December 2006. It follows my balance sheet, so if you’re interested in peeking into my finances, take a look there first. Otherwise, read on to find out how I ended up with $2,866 after all my expenses were paid this month.
The last three months are captured above as well as the full year amounts in each category for 2004, 2005 and 2006. In 2004, I didn’t break out different categories of income, but in comparing 2005 to 2006, my day job income decreased. Despite a nice net raise consisting a low raise in my old job and an increase in moving from one job to another, I made less this year due to no available overtime.
The good news on this front is although raises (even “cost of living adjustments”) next year will scarce according to our director, I’m positioned for an increase. If not, I’ll be on the hunt again. My position can fetch at least $10,000 more than I’m making now, and I’m a solid performer who goes beyond what is expected according to others. Moving on…
It’s hard to believe that I was only eleven cents behind making the same in my side business as I made last month, both times narrowly surpassing my base salary. If this keeps up, I’ll be able to make my goal of $40,000, but I expect more competition to limit income opportunities. For example, AdSense is no longer the wonderful provider it was earlier in 2006.
The reinvested dividend income, mostly in my 401(k) but some in my other investment accounts, was a nice addition at the end of the year. Most of these funds won’t be touched until retirement, so I don’t benefit immediately in my bank account, but it’s more funds for compounding returns which will pay off in the long run.
I haven’t been considering the tax liability due to my business income. I’ve compensated by taking the most withholding (level 0) from my job plus an additional amount each pay period, but that’s probably not going to cover all that needs to be paid. I’ll also invest more in my SEP IRA to reduce the amount owed. I will crunch the numbers soon to determine what my tax bill might be. I may have to start considering estimated quarterly payments, something beyond my scope for now.
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wow, a lot business supplies, you must be expanding huh?
The business supplies category is almost entirely the new computer I purchased last month. It replaced a five-year-old laptop that was no longer functional.
Hey Flexo –
Just off the top of my head, is it worth depreciating the computer and taking that expense attributable to your business as a deduction on your tax return. I’m a new reader so maybe you don’t itemize your deductions, not sure.
I have yet to be successful itemizing deductions and coming up with anything that works out better for me than taking the standard deduction. I have two options: deducting the entire expense in 2006 or depreciating its value. I’ll have to see which works out best for me when I start running the numbers.
Congratulations on yet another good month :) I am sure rest of the year will be better than this. Good luck.