BY: SUSAN POWERS
One trend is that rural areas are seeing renewed popularity as more people choose to live in less densely populated areas and have the flexibility to work from home. Another trend is the remodeling of existing homes or moving out of a city to a place with more space following months of sheltering. Home sales in certain areas are at all-time highs as mortgage rates hit new all-time lows.
A return to outdoor activities is another trend. Drive-In movie theaters are popular again and people are hitting the open road and waters as demonstrated by the dramatic increase in sales of RVs and boats. Tourism is up in areas where people can explore nature with plenty of room to distance.
In areas like Georgia’s Lake Country, where I am fortunate to call home, many of the businesses in our community have benefitted from all the above. For many small business owners, 2020 is shaping up to be one of their best years.
Are you making the most out of your 2020 growth?
Through the various stimulus programs that have been rolled out this year as well as the tax law changes that became effective in 2018, you may find yourself in a much higher tax bracket this year.
If you are busier than ever, you may feel overwhelmed. Finding time to think about year-end or your longer-term plans may seem hard. However, this is exactly when you need to be thinking about it and importantly; talking with your Advisor, your tax professional, perhaps your banker, or attorney as well. Make sure you have time to implement the strategy that is best for you.
How can you make the most of this opportunity now and in the years to come?
- Review your projected year end income & expenses
- Be honest about how much can you afford to set aside for investing
- It may be tempting to remodel the kitchen or put in that new pool but
- what you do with your money now is likely to have the most positive impact on your future
- Eliminate or restructure debt with a lower rate and shorter term
- Rates are low and likely will remain so for a while; not great if you are saving but better if you are borrowing
- A lower rate and shorter term may actually increase your current payment, but it can save you thousands in total interest paid over the life of the loan
- Super charge your savings - If not Now, When?
Have you considered the impact on your 2020 tax liability?
- Don’t be surprised with large tax bill at year end
- Instead - look now for smart ways to reduce your tax bill long term
- Accelerate planned business investments that increase growth and efficiency
- Save taxes by saving for yourself! Even better than spending money on a car or equipment that depreciates, get a deduction by putting money in an account designated for you
- For pass-through business owners operating as a Sole-Proprietor, LLC, or Sub S-corp, be sure to optimize your 20% Qualified Business Income deduction (QBI). Read more about the QBI deduction for small business owners - Click Here For More on 20% QBI Deduction
- Tax rates may change in the future so you will want to balance any decisions for savings this year with considerations for higher taxes in future years
As we approach the 4th quarter, it is a good time to review and reflect on your current situation. Reach out to your tax professional for further advice on your specific tax situation. As always, contact us with any questions you may have about how to best invest for your future.