Episode 41 - Profit First for Authors with Seth Norris, CPA

In this episode of the Six Figure Author Experiment, Lee and Russell are joined by Seth Norris, CPA and founder of Author CPA. Together, they demystify accounting, taxes, and cash flow for authors, with a focus on the popular Profit First method. Seth explains how authors can structure their finances to increase profit, manage ad spend, and avoid costly tax mistakes. From S-Corps to home office deductions, they cover practical strategies to help authors keep more of what they earn while building a sustainable business mindset.

Topics Covered:

* Why most authors avoid money conversations—and why that’s a mistake

* The core principles of the Profit First method

* How to use multiple bank accounts to enforce profit, taxes, and expenses

* Recommended Profit First percentages for authors under $250K/year

* What “real revenue” means and why ad spend may belong in cost of goods

* Challenges of funding growth and why debt can be dangerous

* How to reinvest profit and owner pay strategically

* The role of intellectual property as an asset in author businesses

* When and why to consider switching from sole proprietor/LLC to S-Corp

* The true tax differences between LLCs and S-Corps

* How “reasonable compensation” works under IRS rules

* Smart ways to save on taxes: SEPs, Solo 401Ks, and home office deductions

* Hobby vs. business rules and how to prove intent to profit

* Why mindset matters: paying yourself and thinking like a business owner

* Memorable tax court cases authors can learn from (including a brothel research deduction!)

* Building systems that support sustainable growth and financial confidence

Website: authorcpa.com

Youtube: youtube.com/@authorcpa

Newsletter: norriscpafirm.com/newsletter

This is a public episode. If you would like to discuss this with other subscribers or get access to bonus episodes, visit www.sixfigureauthorexperiment.com