How Do You Distract Yourself From Anxiety?
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Let’s look at it a bit differently.
It is not anxiety and fear that can hold you back or motivate you. It is the interpretation of anxiety and fear that can have an effect. Hence, if you interpret anxiety and fear as positive then you can use it to motivate you.
Now, how do you interpret it positively? Isn’t anxiety and fear all bad? That’s what you are probably wondering. Well, every progress in the world has its roots in anxiety and fear. When Thomas Edison went about burning 5000 bulbs till he got it right, it was his anxiety that carried him forward. Anxious to know what would work and why the current one didn’t work. If he didn’t care enough, he would have just given up. When you are called for an interview, it is your anxiety that lets you be alert and prepare well. If it wasn’t for that, you would just do a mediocre preparation. So, you interpret anxiety as something that is needed to push us forward.
Now, let’s talk about fear. Our fight or flight response system is rooted in fear. It is to alert us to be watchful. As Andrew Grove from Intel said - “Only the paranoid survive”. Fear is needed to be dissatisfied with the current state so that you want to make a change. Without fear, we would just be “ok” with the way things are.
There you go, reframe anxiety and fear as positive and this reframing will let you use it to motivate you. Once that happens, you will find that you don’t need to distract yourself from anxiety.
Impact of the new 20% Pass-through tax deduction for Coaches
Note: I am neither a CPA nor a qualified tax consultant. So, anything in this article should be treated as informational only.
If you are a coach and are filing your income as a LLC or a Sole-Proprietor, you are probably wondering how the Tax Cuts and Jobs Act Pass-through deduction affects your taxes for 2018. The official IRS text for the deduction can be found here. What I have attempted here is to simplify it down to a quick summary:
The official name for this deduction is Tax Cuts and Jobs Act, Provision 11011, Section 199A - Qualified Business Income Deduction. It is popularly known as the Pass-through deduction
The Tax and Jobs Act reduced the corporate tax for 'C' corporations to a flat 21%. Since more than 90% of the businesses report their business income on their personal tax return and are not a 'C' corporation, the Pass-through deduction was introduced to give these businesses a similar break. It is pretty awesome actually!
This deduction allows you to take a straight deduction of "up to 20%" of your Qualified Business Income. What is Qualified Business Income? Read on. Why "up to 20%" ? Well, laws are never simple :-) So, read on...
A Qualified Business Income is an income that you received through your coaching business. So, this does not apply to you if you are an internal coach working for a company and receiving salary. Essentially, if you get a 1099-Misc for your coaching services, that is considered a Qualified Business Income(QBI). You don't need a LLC to use it. (There are some others which also constitute a QBI but you would be better off reading the IRS link above to learn about those.)
So, if you made $100,000 in coaching income in 2018, is that your final QBI? Mostly no. IRS says that you have to deduct any expenses, losses etc. from it and whatever remains is your QBI. So, let's say that your business spend was $5,000 and you had to write off some client non-payment of about $1,000. Then, your QBI would be $100,000 - $5,000 - $1,000 = $94,000.
Ok. I understand QBI. What about the "up to 20%" deduction? Stay with me. If you are filing single and your total taxable income does not exceed $157,500 ($315,000 if married and filing jointly), you can take a straight 20% deduction off your QBI. So, let's say you are filing single and you had an additional income of $30,000 through a dividends and interest come, then your total taxable income would be $30,000 + $94,000 (QBI) = $124,000. Since this is less than $157,000, you can take a straight 20% deduction off the $94,000 QBI. So, enjoy the deduction of $18,800 and you can skip the rest of the article!
So far so good. So, when does the full 20% not apply? Good question. If your total taxable income exceeds the thresholds above, then IRS has made it a bit of fun for you to navigate. Stick with me Coaches. IRS says that if your total taxable income exceeds the thresholds above, the deduction could be anywhere between 0% and 20% depending on whether your business is a "Specified Service Trade or Business" (SSTB) or not. If it is not a SSTB, you're good. You can use the flat 20% deduction. If your business is a SSTB, then there are certain limits.
So, is "Coaching" defined as a SSTB? IRS defined SSTB as "a trade or business involving the performance of services in the fields of health, law, accounting, actuarial science, performing arts, consulting, athletics, financial services, investing and investment management, trading, dealing in certain assets or any trade or business where the principal asset is the reputation or skill of one or more of its employees." The closest that Coaching can come to is "consulting". Although Coaching and Consulting are two very different things in actuality, IRS probably sees them as one. One would never know till IRS provides any further guidance. So, if your income is above the thresholds, then the SSTB clause could apply to you. One could also argue that "dealing in certain assets or any trade or business where the principal asset is the reputation or skill of one or more of its employees" also applies to coaching. However, the law clarified that this refers to celebrities getting income for product endorsements because of being a celebrity. So, coaches are off the hook on that one :-)
Hopefully this gives you some clarity on what the implication of this deduction are for your coaching business. Here's to a fun April 15th, 2018!
So What?
When I coach clients, they often tell me that even with the best intentions and plans, a string of negative thoughts often blocks them from making any progress. One of my recommendations to them is that they follow what I call the ’So What?’ approach - best illustrated with an example.
Let’s say that you have an interview coming up and you’re dreading it since your last one wasn’t that great. Now, your mind goes, “Oh god! This interview is going to be a disaster! I have 5 back to back interviewers and they’re gonna grill me. Last time, I fumbled and could not pick myself up again." These thoughts put you in a negative spiral and you are now fighting the negativity rather than focusing on the interview.
So, what should you do? Rather than going down this spiral, when the first thought hits you, you should just counter with ‘So what?’. Keep doing that for the next thought and the next and the next.
Thought: Oh god! This interview is going to be really tough. There are these five interviewers and they’ll grill me. Last time, I fumbled and could not pick myself up again
You: So what?
Thought: If I don’t do well, I won’t get the job
You: So what?
Thought: If I don’t get the job, I will have to apply to another one
You: So what?
Thought: I’ll have to start the process all over again
You: So what?
Thought:Hmm…(trying to figure out the next question)
This process questions some of the basic assumptions that involuntarily drive our thoughts. Assumptions that often go unchallenged since the mind is in a rush to make conclusions. By asking ‘So What?’, this process is slowed down and it forces our brain to question those assumptions. Things which earlier looked really bad do not look all that bad anymore and those which looked good looks even better! Every time you say ‘So what?’, the energy in the thought reduces and YOU are more in control.
After a few successions of ’So what?’, you will realize that the stakes are not as high as you thought it was. That feeling puts you at calm and you can now focus on winning the situation rather than fighting the negative thoughts.
Try it today. If you don’t, so what?
So, what is coaching?
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I am often asked by my potential clients and others - ‘What exactly is coaching?’. My response has been varied but the one that has stuck the most is this simple story.
Let’s say that you have had this nagging thought for the past few days that you need to do an outdoor activity. You’re not sure what that activity is but it has to be outdoors.
Now, you have this special magic box that you know can help you get to an answer. You pull out this magic box and tell it about your nagging feeling. The question box engages you with some powerful questions and through this process of questioning, you come to the realization that what you really want to do is to go on a hike on the Mist Trail in Yosemite. The magic box also helps you visualize what the destination at the end of the trail would look like. You smile and thank the magic box.
One fine morning, you put on your hiking shoes, stuff your backpack with food and water and head out for the trail. Once you reach the head of the trail, you look around but you don’t see any path that you can follow. All you see is a lot of debris. Confused, you pull out your magic box and tell it that you need help finding the trail. The magic box helps you see through the debris where you clearly see your trail! Excited, you embark on the trail all the while keeping your focus to look through and clear the debris - as the magic box suggested.
As you proceed on the trail, you find that you lose your focus often and need some help to get back on the trail again. You reach out to your magic box once more and it helps you to refocus so that you can be on track. Through this constant guidance from the magic box, you soon complete your hike and you finally find yourself at the end of the trail. Here, the vision of the destination that the magic question box helped you paint comes to life and the nagging thought in the back of your head finally gives away to a feeling of achievement!
What you witnessed was “coaching” and the “magic box” is your coach.