Before you get too ahead of yourself in your business, it’s a good idea to tie up your financial loose ends. Whether your finances are doing well or your accounts leave much to be desired, there is still time to the year on a good note. Getting a handle on your finances will help you put your best foot forward in 2018.
Did you meet your goals? Is your business where you hoped it might be? Finishing the year right means making sure all of your finances are in order. Read on to find out the best ways to get your money in order:
Inventory Your Finances
Examine the condition of your finances to find out whether you’re on the correct path. An easy way to compare your finances would be to take a look at your total net worth (as in your assets without the debts or liabilities) after you have reviewed all of your statements for the year.
As you review this year’s spending, consider implementing automation software to help handle your company’s finances. This type of software can easily take over your money management tasks, allowing your company to save more money throughout the year.
Fulfill Your Retirement Account Contributions
To fulfill your retirement account contributions, you should get as close as possible to paying the maximum amount. To illustrate, individuals that are younger than 50 should contribute around $18,000 at the most. For those of us that are over 50, the maximum amount of contributions is around $24,000.
Handle Medical Expenses
The IRS allows you to deduct your medical expenses to a certain extent. People that are 65 or older have 10% threshold. This means that senior citizens need to make it a point to rack up their health expenses before the next year. Medical expenses that are grouped together will result in a larger deduction. Basically—do your best to make sure your insurance deductible is met.
Handle Your Taxes
Though the end of the year is incredibly busy, be sure not to procrastinate on filing your taxes. Before the busy tax season arrives, make it a point to get your taxes taken care of. Now is the best time to go through your expenses, earnings, and taxes to save you the time and trouble of waiting until that April deadline.
Donate to Nonprofits and Charity
Making your charitable donations before the end of the year will help you receive your tax deductions as soon as possible. A great way to maximize the advantages of your donation is to donate securities rather than money. For example, donating property allows you to avoid any capital gains.
Automate What You Can
Although this might be expensive to begin with, investing in software will pay off in the long run. Consider sales management software to help streamline the sales and order processes. If you decide to go along with this, your employees will save a lot of time. They won’t have to worry about inputting information–which can take forever. Instead, they can use their time by making more sales. This will make work more efficient.
Ask for 2016 529 Reimbursements
This is the best time to make sure you have received reimbursements for educational expenses you have accrued throughout the year. Any expenses that have been paid during the past calendar year should be refundable in the same year. For example, if you write a check for tuition for 2019 during 2018, you can request a settlement from their 529 college savings program before 2018 ends.
Put Your Raise to Use
If you’re fortunate enough to get a raise, be sure to put it to good use. Whether you are planning for next year’s raise or you still have money left over from our raise this year, it is a good idea to decide what to do with your additional income. Experts suggest using your raise to increase your contribution to your 401(k). Additionally, you might want to accelerate the your debt payoff or contribute to your emergency fund or mortgage.
Use Your Losses to Offset Your Gains
Say you sold your investments this year for a significant profit—you should sell other investments that are experiencing a loss to offset these gains. As you will be taxed for the profit you have made, bonds, stocks, and real estate that have losses will help to lower your tax burden. This tax loss harvesting will allow the unrealized loss of your investment to be counted the realized gains your company made during the year.
Keep Your Goals
After handling all of your financial responsibilities for this year, you can’t end on a high note without setting goals. Create plans for the next year, meet with financial planners, and identify what kind of positive change you would like to sense for your finances and business during the next year.
Whatever situation you find yourself in, there’s no time like the present to secure a better future for yourself and your finances. By tying up all your loose ends, contributing to charity and your investment funds, you’ll be able to start the next year of on the best note possible.