New Paragraph

Five Things Business Owners Should Do Before The End Of The Year

Dec 01, 2018


Business Owners Should Do. There are plenty of things savvy business owners should do before year’s end: set goals for next year, thank employees for their contributions, conduct year-end reviews, plan the company Christmas party… the list is long. But you’d better add tax planning too!For this blog, The Alexander Group, a top-rated business consulting firm in St. Louis, we will focus on things that will help you lower your taxes for this year.


Sell Losing Stocks


The goal here is for your annual capital losses to exceed your annual capital gains. If you own stocks whose value has decreased since you purchased them, sell enough of them so that you have at least $3,000 in losses. The IRS will then permit you to deduct up to $3,000 worth of said losses from your annual business income. And if you sell more than $3,000 worth of depressed stocks, the overage carries over into next year.


Charitable donations


There are at least 1.5M nonprofits and charities in the United States, and charitable donations are of course a very popular way for businesses to lower their income taxes. Donations can take the form of property and/or money, which you can then itemize as deductions on your taxes. Here are some things our St. Louis-based management consulting company suggests you keep in mind:


  • 501(c)(3) is the IRS’ designated code for charities that qualify for tax-deductible donations
  • The IRS issues a determination letter to each charity that confirms the charity’s qualifications
  • This letter and all other relevant information can be easily accessed via most charities’ websites
  • Churches and other religious institutions are the only entities that can qualify as 501(c)(3) without an IRS determination letter


Regardless of which charities or how many charities you donate to, keep a record of each donation. This is easy, since every charity offers a donation receipt confirming your cashless, “quid pro quo” transaction.


Open a Health Savings Account (for the self-employed only)


If you’re self-employed and paying for your own health insurance, a health savings account (HSA) is a combination IRA/health insurance policy with a high deductible. The benefits to opening up an HSA include:


  • Implement an HSA by December 31 and you can make 12 months’ worth of deductible HSA contributions
  • HSA contributions can be withdrawn and used to pay for virtually any uninsured health-related expense
  • Withdrawals are tax-exempt


Buy Business Equipment


Computers, desks, filing cabinets – buy whatever your business needs before year’s end and you can deduct the entire amount from your business income, instead of having to depreciate the expense over several years. The annual limit for this deduction if $500K, and it covers a wide range of business-related items that are used more than 51 percent of the time. Also, through 2019 a “bonus depreciation” is available for first-year business equipment purchases.


Retirement Plans


All businesses are recommended to create and fund retirement plans (401(k)s) for the benefit of their employees and for the related tax-related upsides. For the self-employed, the tax benefits of setting up a retirement plan are especially lucrative, and there several options to choose from: IRAs, Keogh plans, SEP-IRAs, etc. Your contribution limit depends on the plan you choose and your net yearly earnings.


Business Planning and strategy consulting are just two of the high-level services The Alexander Group provides to St. Louis business owners. Contact us today for more information.

 

Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.

08 Mar, 2024
Have you been having trouble sending out bulk emails and email blasts recently? Are you suddenly having deliverability issues with clients and vendors you've been emailing for years? If so, you're not alone — Google and Yahoo rolled out new DMARC requirements in February, creating headaches. We have heard that many of our small business owner clients and their IT departments are having such headaches.  To investigate this issue, we have leaned on IT expert and long-time TAG peer board member Fred Moore of Moore Computing. Fred has walked us through changes to DMARC and offers advice on how small business owners can get their emails back into the inbox. While DMARC changes have thrown many into a temporary tailspin, the changes represent a move to safer and more secure email communication for all parties. Let's discuss what small business owners need to know about DMARC, how they can ensure their emails reach customers' inboxes, and how to keep their business digitally secure. What is DMARC? Cybersecurity measures are similar to cars: most of us drive one daily, but most are unable to lift the hood and understand exactly how it runs. Most of us rely on cybersecurity measures to keep our businesses safe online, but we may need help understanding the technical elements that keep us safe. That said, all small business owners should have a general background in cybersecurity, and DMARC is a great place to start. DMARC stands for "Domain-based Message Authentication, Reporting & Conformance." The idea behind DMARC is to limit the volume of scams and phishing on the internet. DMARC works with SPF and DKIM. SPF (Sender Policy Framework) is a list of services and servers that are authorized to send emails on behalf of your domain, and DKIM (DomainKeys Identified Mail) is a digital seal that verifies the content of your email hasn't been altered or tampered with. DKIM is also able to withstand email forwarding, whereas SPF can not. Senders and Recipients At its core, DMARC validates the authentication of the sender of an email message. When there are deliverability issues with a message, it usually falls back on the sender. Small business owners know the importance of getting marketing campaign emails and other communications into their customers/clients' inboxes; to accomplish this, it is crucial to follow all protocols to ensure you have the best chances to reach customers' inboxes at an optimal place (i.e., not the spam folder), and avoid spam complaints. How does your email make its way to recipients? It follows a basic flow: ● The email is composed and sent ● The sending mail server will add DKIM ● The email is sent to the recipient's server ● Validation tests begin, checking DKIM, SPF, and DMARC policies ● The email either passes, is quarantined, or is blocked/deleted ● If the email passes, it goes through the recipient's user filters and inbox rules
11 Jan, 2024
Running a small business is a challenging task. It requires dedication, hard work, and juggling multiple responsibilities. Often, small business owners try to cut costs by taking on tasks themselves, even if they are better off calling a professional. While the intention may be to save money, the reality is that DIY can lead to costly mistakes and legal pitfalls. Let's explore the common mistakes small business owners make when they opt for a do-it-yourself approach and why investing in professionals like lawyers, accountants, and general contractors is crucial for long-term success. The Myth of Saving Money Many small business owners believe that handling tasks themselves will save them money in the long run. However, this is often a misconception. While it may seem cost-effective initially, the lack of expertise and knowledge in critical areas can lead to costly mistakes that can ultimately hinder the growth and profitability of a business. The Value of Professional Services Professional services, such as lawyers, accountants, advisors, and general contractors, bring expertise, experience, and a deep understanding of industry regulations. They can provide valuable guidance, prevent legal issues, and help small business owners make informed decisions that align with their long-term goals. Most of the time, business owners don't consult with their advisors because they are wary of spending money on bills from their advisors on top of other expenses. The phrase "You can pay me now, or really pay me later" comes into play in these situations. Business owners should not be afraid to discuss money and bills from professionals with their advisors, and they should properly compensate advisors for their time. Complaining about spending a few thousand dollars to review a $20,000,000 contract can cost hundreds of thousands due to difficult payment and dispute resolution terms.  Protecting Your Intellectual Property Intellectual property (IP) is a valuable asset for any business. Failing to protect it can lead to brand confusion, loss of revenue, and legal battles. Trademarks, copyrights, and patents should be filed appropriately and protected to ensure exclusive rights to your brand name, logo, or product design. How Professionals Can Help Lawyers specializing in intellectual property can guide small business owners through filing the necessary documents and paying the required fees. They can conduct an IP audit to identify and protect essential assets, develop IP protection strategies, and enforce IP rights if violations occur.
09 Oct, 2023
In the 1999 film “Any Given Sunday,” directed by Oliver Stone, Al Pacino delivers a powerful and memorable locker room speech that has resonated with me for years. The speech, delivered by Pacino’s character, Tony D’Amato, before a crucial football game, encapsulates the essence of the film and the themes it explores. While the speech is specifically about football, its underlying message can be applied to various aspects of life, including business. The idea of fighting for inches, continuously improving, and eliminating mistakes is a powerful metaphor for the importance of perseverance and adaptability in business. It highlights the value of small victories, incremental progress, and the relentless pursuit of excellence. For business owners, the speech serves as a reminder to focus on the details and the small wins that can accumulate over time. Just as a football team must fight for every inch on the field, a successful business must be diligent in managing its resources and seize every opportunity for growth. It emphasizes the importance of building a team that shares the same values and is committed to continuous improvement. Think of it in terms of all the inches and seconds around us in business and how $200 here and $50 there adds up. The whole concept of continuous improvement, eliminating mistakes, and fighting to get better is what I believe Oliver Stone intended when he wrote it. I love it as much today and as when I first saw it and the metaphor of getting into business and being profitable. You can read the transcript here . Or watch it here:
More Posts
Share by: