Year-End Financial Planning Preparations for the Small Business Owner
Posted by admin on November 20, 2008 in Business Financing [ 1 Comment ]
As this historic year comes to a close, it will be necessary for all small business owners to take time from their busy schedules and conduct careful inventories of their respective financial situations. Unfortunately, in many cases due to the dramatic downturn of the second half of 2008 it will be a difficult and painful process. As a small business owner there are a few suggestions I have as the new year approaches. Conducting a thorough financial review will be an important first step in terms of tax preparation, a 2009 company operations budget (although in some cases this particular exercise will have already been completed) and anticipating changes that may be in order when the Obama Administration takes office. It is also absolutely the right time to make decisions on ways to make your organization leaner and more efficient heading into the new year.
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The details in regards to proposed tax cuts are relatively few under President-elect Obama’s plan, even as to whether his $250,000 threshold is on Adjusted Gross Income or Taxable Income. That would make a big difference for many small businesses. Generally for everyone above the mark, you would want to maximize as much as your cash flow allows in terms of contributions to retirement plans: SEP’s, Simple’s, IRA’s, deferred compensation plans, etc. Equipment purchase write-offs are most important in those high income years. For one to consider deferring Social Security benefits or taxable retirement income to later years when income is lower may be preferable. At this point there is very little information as to what the Obama plan actually is and what will materialize from it, so it will be advisable to watch closely how this all unfolds in future months.
It’s certainly very easy to be negative and cynical when times are tough, especially after the second half of 2008. However, it’s also essential to keep in mind that history dictates this as a cyclical occurrence and things should improve at some point in 2009 or 2010. It’s equally essential to take a few minutes to remember every day how fortunate we are to live in the greatest country in the world. I ask that you reflect upon the incredible freedoms and capitalistic traditions we all benefit from.
During a year in which there has been a lot of disagreement throughout our country on a long laundry list of issues, at the end of the day, I don’t think you’ll find a lot of division on this particular statement.
Peter Miralles is the President of Atlanta Wealth Consultants (www.awc2.com).