A new year deserves a review of lessons learned and a set of new goals. Whether you are an individual or business client, take a few minutes to review this list of 12 suggestions from our tax and financial professionals, most are painless:
1. Make an inventory once a year as an individual and twice a year as a business. Keep a balance sheet for your household, just like you do for your business. Assets will include savings accounts, retirement accounts, real estate, car(s), etc. Liabilities will be credit cards, mortgage, student loans, etc. Attach approximate values to each or get an official estimate/valuation if a high ticket item. You may not even realize thru appreciation you now need additional insurance. Businesses should focus on purging aging inventory, shortages, movement of popular items etc., it gives you more cost control over operations.
2. Examine the risk tolerance of your investment accounts, and talk to your investment advisor about the risk/reward tradeoffs, and diversification. Our TFG Financial Advisors professionals would be happy to do a portfolio assessment for you.
3. Review your retirement plan contributions and try to increase them if possible. You may have tapped these accounts or suspended contributions due to the pandemic. Get back on track, and put the power of compounding interest to work for you. Remember, many changes were made by the Secure Act that benefit individuals and businesses get tax breaks: https://www.fuoco.com/resources/tax-alerts/517-retirement-planning-and-the-secure-act-
4. Build up your emergency fund if you borrowed from it during COVID. Maybe tuck away that 2nd stimulus check, if you don’t need it right now.
5. Check your withholding and fill out a new W4. You can find it here: https://www.irs.gov/pub/irs-pdf/fw4.pdf
6. Evaluate your expenses. This actually might be painful, whether for your household or your business, but it will be an eye opener. Identify ways to cut down and decrease future debt and pay off what you can, the economy is not yet out of muddy waters. You might actually be in a better position since you are telecommuting, eating out less, etc. Once you have a handle on your expenses, look at your projected income for 2021 and redo your budget. Same goes for biz owners.
7. It makes sense to revisit your business structure, product line, vendor contracts, leases, workforce flexibility, budgets, projections, debt etc. Make adjustments or get better terms where you can.
8. Look into applying for a 2nd PPP Loan (or a 1st, if you have not already). More funds have just been made available, see if you are eligible here: https://bit.ly/2L2JtNy
9. Take advantage of newly extended and expanded tax incentives for employers like the ERC and more: https://tinyurl.com/y4m5jrwn
10. COVID taught us life has unexpected twists and turns. Business owners should develop a succession plan for their business, and individuals should get an estate plan together: https://www.fuoco.com/resources/tax-alerts/617-estate-planning-with-2021-vision.
11. Take advantage of lower interest rates to refinance where you can for your home, car, business location, equipment, etc.
12. Remember bad times may still present opportunities. Individuals can capitalize on new economic trends and investment opportunities in the market, or business owners can capitalize on new trends in products and services, as well as take advantage of M & A opportunities that now present themselves.
Reach Out To Us: Tax planning and financial planning should be your #1 New Year’s Resolution. Protect your family, protect your business, and lower your taxes and liabilities. Put all of our resources to work for your family or your business through the professional staff and services offered by TFG Tax and Accounting and Tax, TFG Financial Advisors, and TFG Business Advisors. Contact us toll free at 855-542-7537 or CPA@Fuoco.com.
