For the last half, a year I have been preaching to you on my podcast that it is important to plan. We are about at the close of the year 2020 and I bet a lot of you have done no planning for your new year. Am I right?
In my podcasts I have told you how much I believe in journals and keeping one. 2021 is about here so what do you need to do in your journals? Let talk about it.
Call Your Tax Practitioner, listen there may be a few more things that you can do to reduce your tax liability, but you need to talk to your tax advisor. You do not have much more time here. Also, if you are a small business there have been tax changes because of the COVID-19 pandemic that may help you. Call your tax practitioner today. Over the course of 2020 I kept telling you on my podcast sit down with your tax advisor over the course of the year, or when there are changes in your tax status (Marriage, divorce, separation, etc.) Get it done.
Get a journal - Keep a journal, when you write down your finances and goals for the new year you will be able to plan better, it become personal. You take responsibility. You must look at it every day in your decision-making process. Get a journal, they are at every office supply store, Cary it with you, write down conversations, what was said in meetings or with family. Get a journal! Plan daily.
Create a budget, list all your projected income, all your living expenses (Including debt) and then minus your expenses against your income and see what you have left over. This will allow you to see what cash is available at the end of each month that you can either pay down your debt or save (retirement account or other venue). All of us are required to be good stewards of our financial affairs. If not, we are just fools. If you would like to have an excel version of a budget, I have made one for you - BUDGET
Wills and Trusts, Medical Directives, I was talking to a very long-time friend who are in their 60's. I asked them both if they had put together a will, trust, and medical directives? The answer, in their 60's was NO. In life death can happen at any time. Now I know you do not like to think about death, hear about death, or experience death. But it must be talked about and planned for. If you do not have a will, trust, or medical directive yet - get it done. Do it in the first quarter of 2021. No matter what age that you may be, get your life and financial affairs in order. Sit down with an attorney and get this done.
2021, As of this time none of us know what Biden will do as President about business and individual tax policies. All that he has said is that he will raise taxes. Our planning must be conservative in how we spend our money in 2021. Conservative spending and management are vital for 2021, no question about it. If you look at the small business confidence it has dropped 2% since November. That gives us a slight indication that even businesses are going to operate conservatively. The bigger corporations and investment hedge funds are moving their money and capital offshore to friendlier tax countries with lower tax rates. It happened with Obama and is now happening with Biden because we just do not know what is going to happen. When you do not know businesses go to friendlier places. Under the Obama administration businesses were put on pause because of the uncertainty. We just did not know. Easy decision - spend and act conservative in our financial affairs.
If you have any questions or would like to set up a 60-minute business advisory session please go to my online appointment center at: https://calendly.com/mlodge/60-minute-business-consultation
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Michael Lodge is a Nationally Certified Professional Mediator specializing in business disputes, as well as family conflicts. He has written three books and hosts an international podcast on IHeartRadio and other podcast media stations.