Another Crappy Year Is Over

2017 was one of the worst years ever on so many levels. I've already said that Curio City had its worst December by a large margin: I only booked $1,690, compared to LY's previous record low of $4,637. For perspective, December 2008, when I was at the top of my game, brought in $16,163 -- 10 times what I made this year. 

Remember that the following numbers include Blue Hills, and the payroll line includes a couple of checks that went to my wife. I won't have "clean" Curio City numbers again until February.

December

Total income: -64.1%
Payroll: +37.6%

Marketing: -62.8%
Net Income (Profit) vs LY: -206.3% (-$1,585)

Actual Profit/Loss: -$816

2017 (Almost) Final

Total income: +41.9%
Total COGS: +2.3%
Payroll: +218.9%

Marketing: -44.2%
Net Income (Profit) vs LY: +258.4% (+$4,784)

Actual Profit/Loss: +$2,934

Annual sales were down by 5% from last year; that's my sixth consecutive decline. 

Profit is a bad thing at tax time, so I'm glad that fell from last month. Technically, Kraken owes me that bottom-line number, which is going to add roughly $735 in federal and state taxes to my personal 1040. In reality, Kraken can't really afford to pay even the anticipated taxes. I insist that it do so anyway...so I just transferred $800 from the company to myself a few moments ago in the guise of a "shareholder loan repayment", which is somehow preferable to a "shareholder distribution". I don't know why. Kraken still owes me $12,625 of the roughly $21,000 that I put into it in 2005.  

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Speaking of taxes (again)...I still don't know if Kraken Enterprises is, legally speaking, a pass-through entity in the eyes of the IRS. Logically, of course it is; each year's profit or loss goes onto my personal 1040. But tax policy is only ever accidentally logical. This story only sowed more doubt: 

The new pass-through provision is designed chiefly to aid capital-intensive companies, like a factory or a bakery, while excluding certain service industries such as accounting and medicine. But for some kinds of solo workers it could mean savings of hundreds or thousands of dollars, if they incorporate as a pass-through business. 

Details of exactly who might be able to claim these lower rates are still a bit unclear, even to specialists, and probably will be hashed out over the coming months as tax advisers and their clients test the limits of what qualifies as business income. 

Curio City could arguably be considered capital-intensive, since 80% of its revenue covers costs. Blue Hills, OTOH, is a service business with very little overhead. I might have to keep Curio City alive indefinitely just so that Blue Hills can qualify for the pass-through rules. But who knows? Not the experts, apparently. I'm sure I'll get a memo.

Massachusetts considers me a pass-through, but I'm exempt from withholding because all of my stockholders (me) are Massholes. I'm supposed to issue myself a form stating that that's true every January. Anarchist that I am, I don't.

I had wanted to file my tax returns early, but I spent most of this week fighting my dying laptop. Its performance started degrading a couple of weeks ago, and by yesterday it was all but unusable. All I'll say about that is that CHKDSK may be >30 years old, but it still saved my bacon. I had really feared that I would have to rebuild Kraken Enterprises from the ground up on a new machine, but now I'm tentatively confident that I can keep this three-year-old Dell going for another year.

(For some reason, I can't upload any images to Imgur via any method today and I've wasted way too much time trying. Today's hotlinked pic might not work.