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Archive for December, 2014

Will You Have Financial Goals In 2015?

Back in 2013 we had an article on the blog titled Setting Financial Goals. In that article we laid out what we considered the 3 most important things for any financial goals one might wish to set: saving money; reducing debt; and increasing income.

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Every once in a while we get the opportunity to work with clients to help them set financial goals for the year. The year doesn’t always start at the beginning, but it’s a good time to do it because it fits with the tax time period.

Almost everyone that comes in wants to talk about one thing, which doesn’t quite fit any of the three, though comes closest to saving money; reducing how much they might owe in taxes. It must be an occupational hazard for being a consultant because, though it’s a big part of what we do, it’s not the only thing we do.

Truth be told, taxes aren’t a major concern when other needs are met. Although you sometimes hear a few rich people complaining about having to pay too many taxes, the overwhelming majority don’t have a problem with it because they have enough money and, if they’ve got good accountants, all that is taken care of and they still have lots to play with.

If you’re worried about having to pay taxes, learning how to save money and cut corners on spending will provide you with enough to pay your taxes. Also, if you’re really good you can make sure you’re having enough taxes taken out of your paycheck if you’re still employed.

If you reduce your debt you invariably end up with more money. That’s because as you pay your bills down you owe less, and even if you keep paying them at the same high rate you’ll pay off the debt sooner, which means you’ll have a nice chunk of cash you can move elsewhere.

If you increase your income… well, we already touched upon that part. 🙂

With that said, do you have any ideas on what types of financial goals you really should have? If not, we’ll give you 3 to think about:

1. Find ways to generate more income in 2015. There are so many ways for people to do this that all it takes is an hour of uninterrupted thought every day for a week to plan it out and you could be making more money in another week. The idea is to think about what you can do, how much more money you’d like to make, and then go for it. Many people are doing it; you can also.

2. Set a goal to pay off one of your bills where the payment starts at least at $100 a month. If you don’t have anything like that good for you. If you do, realize that if you could pay one of those bills off you have the opportunity to have an extra $1,200 a year and it’s tax free! Pay off more debt and you’ll have more money the same way.

3. Think of one thing you’re willing to give up or alter that will help you save even a little bit of money. For Christmas one of my friends got a coffee maker and many bags of special coffee that can be made at home. The reason was her daughter hated knowing that her mother was stopping at a national coffee location buying expensive coffee every day, both going to and coming home from work.

Suddenly, her mother can now save $10 a day, which equates to around $300 a month, which can be applied to other things. And the coffee will be just as good, maybe even better because that same brand can be bought in many stores if she wishes to stick to that brand and will still cost her less than paying someone else to make it.

Financial goals don’t have to be really big to make a big impact. All it takes is a little bit of ingenuity adn the willingness to make a change here and there. After all, isn’t a new year a good time for resolutions and goals?

We wish everyone a safe and happy new year, and of course a financially successful year as well.
 

Business Tax Information You Need For 2014

As we come to the close of another year, we’d like to highlight a few things you might need to know as we head into 2015. A quick disclaimer up front is that some of this information is geared towards New York state residents.

* New York state’s Corporate Minimum Fixed Dollar amount is based on gross receipts. Extensions should be filed by the beginning of March. A few things to know regarding this are:

  • Fixed dollar minimum tax for general business taxpayers under $100,000 is $25;
  • More than $100,000 but not over $250,000 is $75;
  • More than $250,000 but not over $500,000 is $175

* The penalty for those who don’t have health care coverage will be paid out in 2015. The minimum penalty amount is $95 for singles, upwards of $1,000 for married couples with dependent children. It’s all based on your tax return. You need to know that this counts as income, not what you’ll actually have to pay so don’t panic. Still, it’s something to look at for 2015 because the rates will be much higher come 2016. Also, if you paid for health care insurance through the program this year, didn’t get any upfront adjustments and didn’t have any of it paid by an employer, you’re probably going to get a nice deduction, as well as be qualified to write off other health care expenses.

* Business mileage for 2014 is 56 cents a mile. The minimum allowable payment for meal expenses is $46.

* If you have kids in college, you can still get the American Opportunity Credit up to $2,500, which can be used for the normal 4 years it takes to get a bachelor’s degree. Out of that, 40% of it may be refundable. The student loan interest deductible is still $2,500 a year.

* The maximum Earned Income Credit for 3 children is $6,143 and $5,460 for 2 children.

There are many other changes this year, which includes many deductions taken away. As always, we recommend seeing an accountant to try to get the maximum benefit possible.