Tales of a Young Entrepreneur: Tax Season
Being a young entrepreneur wasn’t always easy. When the grass wasn’t growing, I had to figure out a way to keep a steady cash flow. I was getting close to 15 years old, and going to the movies with friends wasn’t cheap. A year earlier, I had saved up enough money to buy a new computer, with the intention of playing enough video games on it to rot my eyeballs out. Little did I know, this magnificent purchase of mine would end up paying for itself.
Tax season had arrived, and my dad asked me if I was interested in doing his to make a few bucks. He said he would buy the tax software if I filled everything out. It seemed simple enough.
“This was a valuable lesson for me as a young entrepreneur: never under-value yourself.”
I gathered up all of his documents and went to work filling in the boxes and making the necessary mouse clicks. The process was a learning experience to say the least, and I grew vast sympathy for those who had to do this for a living. Fortunately, by the time I was done there was a pretty sizable return, which I knew my dad was pleased by. The fact that there was an “audit protection guarantee” was icing on the cake.
I didn’t really think anything of this for awhile until about a week before April 15th (much like today), when my dad approached me asking if I was interested in doing any of his friends’ taxes. They were procrastinators like many other sad souls out there. I obviously said yes, and by the third time around using the software, I was pretty much a tax expert and was getting my client good returns. I was not only giving tax advice, but retirement advice as well like considering opening an IRA for a greater deduction.
Then the fourth customer came, and all of that changed. I went through all of the questions three times, but every time I did, it said the same thing: he owed money. This was definitely tough. One of the reasons I assumed I even had customers was because I was getting them big returns, but this changed everything. Would he be mad? Would he wish that he had consulted with a “real” tax professional rather than a 14-year-old with a nice computer? I didn’t know what to do because I didn’t want to be the one to break the bad news that he owed the government money.
After a few minutes of mental anguish, I knew I had to tell him. I came out to find my dad chatting with him in the garage. His first question when he saw me was “How’d we do?!” I looked down at the ground, ashamed. I knew I had to say something, but before I could he chuckled a bit “That bad, huh? Damn, it seems like they find a way to get me every year!” My eyes shifted up curiously. So this wasn’t the first time he owed in taxes? I wasn’t going to be the first person to ever break the news to him that he owed money to a government hell-bent on taking it from him? WHAT A RELIEF!
I nodded and said “Yeah, it looks like you owe money. I did everything I could.” He simply replied “No problem, how much do I owe you?” I couldn’t begin to fathom taking money from someone who I just caused to owe money to the IRS (or so I believed). I told him there was no charge since I couldn’t help him out.
I was shocked when he laughed even more and shook his head, “No, no, no, you did my taxes and you deserve to be paid for your work. Is $50 good?” All I could do was nod yes – hell yeah I just made $50 bucks! “Great” he said, “you’re still cheaper than H&R Block.”
This was a valuable lesson for me as a young entrepreneur: never under-value yourself. Furthermore, never try and take the blame for something you didn’t do just because you feel sorry for the person. It wasn’t my fault he owed money in taxes – that was a natural consequence of not filling out his W4 appropriately. By offering not to take any money for doing his taxes, it was like I was trying to take responsibility for his mistake, and all that does is lead to two people worse off than they were before.
I was fortunate I didn’t have to learn this the hard way as an entrepreneur sometimes does. My customer valued the work I did for him, and in turn did not let me under-value myself.
Was there ever a time you feel you under-valued yourself? Please share in the comments below.