What Small Business Must Do In December

We wish it was about letting our employees and ourselves find time for online shopping (yep, it’s a Covid Christmas this year — forget the Mall). It’s not about wearing red and green to the office and bringing in cookies to share. Or if you work from home as so many of us are doing, it’s not about wearing our comfy ugly Christmas sweater or Santa Socks.

What it is about is getting ready for 2021. Sort of a Christmas list, for business.

The List

Prepare the 2021 budget. Include your monthly revenues and expenses, and a projection of how much you need to bring in next year to remain solvent or hit revenue goals. If the numbers don’t add up, it may be time to shop for additional financing.

Double check SBA Coronavirus Relief Options. Be sure you have asked for or received all the help you can get from the SBA.

Take inventory. Calculate your ending inventory to avoid any surprises starting 2021.

Organize files. Lack of organization can hurt your business, and this is the best time of year to clean up your files so any mistakes from 2020 can be rectified now and not carried over into the new year.

Prepare for Tax Season. Start by understanding your tax filing deadline, then gather and analyze your records looking for tax deductions and credits. Set aside estimated tax payments or determine whether you need a filing extension.

Or, simply let DL MoneyMatters do handle most of this list for you (highly recommended)!

Finally, promise to put 2020 behind you emotionally and get energized for 2021. Do something kind for your employees and for yourself. Get together and set outrageous goals for the coming year. Then take some time off to spend with close family and to celebrate what Christmas is really all about—love, mercy, compassion, and the call for us to share our time, our attention, and resources with others, especially those who need it most.

Merry Christmas!

Tax Less – Give More

money umbrellaThe big gift under the Christmas tree for most Americans this year was the 2018 Tax Code for individuals and businesses. Santa has not delivered a gift this significant for U.S. taxpayers for over 30 years. Most of us are happy he made it down the chimney.

To explain in our blog what’s included in the bill, and how it is likely to affect you and your business, would be redundant. Plenty has been written in the press and online. An article that we found to be easy to understand comes from The Motley Fool. The impact of the Bill is explained in layman’s language and we especially like the tables. According to the Fool, a few interesting individual deductions will soon be history. These include theft losses (no need to fill out that pesky police report), unreimbursed employee expenses (no incentive to bring the boss a Starbucks latte), moving expenses (it now pays to stay in one place), and employer-subsidized parking (no problem for us whose office happens to be in the suburbs).

For corporations, the GOP-proposed Bill is exciting. Businesses can sell worldwide without double taxation, and if you’re one of the those businesses who made money overseas but couldn’t afford to bring money into the U.S. because of taxation, it’s good news.

Read the entire article (really, it’s a good one).

Of course, not everyone is happy. Parents who sacrificed so their kids could go to college won’t get the $2,500 tax credit and charities are all wondering whether the goodness of the average American wage earner will be “as good” if they aren’t able to deduct charitable donations. We believe that generosity and compassion, more than a tax deduction, drive American giving. Next year will be our litmus test. In the last election, according to Pew Research Center, 54% of us Americans voted, but 60% of us gave to charity.

Charitable giving, in all its forms, transcends politics. Giving is as American as apple pie and will remain that way regardless of our politics, tax rules, and financial forecasts.

8 Tasks for Small Business Now

 clock (time) and coins (money)Are you still eating the leftover Reese’s Peanut Butter bars left over from Halloween? Are you thinking about where to share Thanksgiving Dinner? Has it occurred to you yet that you need to start a Christmas list for friends, family and co-workers? And what about that holiday party? Sometimes it seems as though early November is merely a gateway to planning, scheduling, socializing and going just a little nuts thinking about the coming holiday season.

Slow down there, cowboy! It’s time to add some end of the year business planning to that mix. We can help!

  1. Verify your employee data. Make sure your records have a few things correct, because employees marry, divorce, and move. The items to check include correct spelling of names, name changes, current addresses, birth dates, and SS numbers. Also be sure tax ID numbers for independent contractors’ Form W-9 are correct and local taxes are accurate.
  2. Have you closed out each quarter for filing payroll tax returns and personal income tax? If there are any discrepancies, make corrections on the 4th Quarter Form 941.
  3. Check for any 3rd party payouts for disability so you have accurate reported amounts on tax returns and W-2 forms.
  4. Even though Congress is beating the drums regarding the ACA, tax form requirements are still in effect. Be sure you know whether you need to comply and check the IRS website for 2017 instructions for Forms 1094 and 1095.
  5. Check for unpaid bills or open invoices and clean up all your accounting-related processes so you can hit the ground running for end of the year reports.
  6. Change your passwords now to protect your business going into 2018. Don’t let your company be at risk for data hacks.
  7. Conduct employee reviews to ensure that everyone understands what’s expected and don’t forget to praise employees for the good job they did for the company this year.
  8. Set new business goals for the coming year. Write them down and share them with key employees.

Early preparations and organization helps us better reflect on the successes of the past, see clearly where change is needed, and prepare you for the challenges ahead.

You can spend more time watching the weekend games, get some fishing in before the really cold weather sets in, or shop early—if you have us do the accounting-related processes for you. If you only have to tackle Items 7 and 8, the coming holiday season just might be better than ever.