February 16th, 2021 | Overnight learnings
Yesterday my accountant contacted me and requested some money. He talked in some jargon language and asked for one thousand dollars. "Bla bla bla bla bla. $1k this month." What. The. Fuck. I'm here saving and managing my personal expenses diligently, and out of the blue these kind of expenses arrive? Why wasn't I aware of this upcoming expense? And why don't I even understand him? Back in November, I decided that I would quit my job and go full time on Cyberleads. I talked with many accountants. But I ended up going with one suggested by a trustable friend and fellow expat of mine, here in Italy. Heard great things about him. "He's expensive. But he's amazing. He only works with international clients and helps them with various tax exemptions." At the time, I was still working full time. I was also working on Cyberleads. And I hadn't done anything legal. Regarding incorporating. Filing taxes. Bookkeeping. Accounting. Nothing. I hadn't even transferred my residence to Italy, yet! I had too much on my plate. At that point in time, all I wanted was for someone to take this stress off of me. I was more than happy to pay a premium price for that and leave me alone in my little bubble of ignorance. But now, things have changed. I have time. And I can sit down and educate myself about what I have to pay and when. All I knew is that I'm allowed a 90% tax exemption on my income tax, since I'm an expat in Italy. And I have gotten that exemption. But, as always, there is fine print. There are other things I have to pay. Which, unfortunately, are not negligible. Pension taxes. Pre-paying taxes for the next year. Withheld taxes. There is no way I can run a business without knowing these things. What expenses I'll have. When I'll have them. And forecast what my cashflow will look like. Last night, I downloaded a book about laws and taxes in Italy. It was written in 2020, and had 5 stars on Amazon. It had many real use cases from real clients. Funny enough, many of the clients were expats, freelancers and digital nomads. And were benefitting from exactly the same law and tax benefit as me. I read it in one go. In a single night. And it was eye-opening. All the words and jargon I'd been hearing for months, suddenly made sense. I spoke with my accountant again today. For the first time, we were speaking the same language. I was able to tell him how I want to proceed. He accepted and actually told me that my alternative suggestion made a lot of sense. Your taxes are your own responsibility. Not your accountant's. And your financial literacy also. I downloaded two more books today. One on the basics of accounting, and one on the basics of bookkeeping. I have to understand the basics. At least!