2020 is almost over, and for many of you, it can’t end soon enough. There will be plenty of time to celebrate the end of one year and to hope for better days in the one ahead. But before we get to that, take these steps to get financially ready for 2021.
1) Review your goals: The end of the year is a great time to review the goals you made at the beginning of the year and set new ones for 2021. How did you do this year? Is there anything you’re proud of accomplishing? I like to start with bright spots because they can guide you toward success as you set new goals. But let’s be realistic, too; 2020 threw us a lot of curveballs.
Was there anything you wish you could have done better? You can also learn from any potential stumbling blocks and figure out how to use them as stepping-stones next year. You may also want to take time now to review your net worth. That’s one way to gauge the progress you’ve made in your financial health this year.
2) Update your budget: Did you save the money that you wanted to? Pay off the debt that you needed to? The end of the year gives you a solid end point to assess whether met the goals you set at the outset of 2020. What if you didn’t have a budget or financial goals? You’ve got a blank slate ahead. Why not create a budget that works?
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3) Create a holiday bucket: Holidays can be budget breakers, so why not incorporate them into your spending goals right from the start? Christmas may look a lot different this year. But you can still create a separate bucket for holiday spending and when that money is gone, stop spending. You’ll thank yourself in January when you don’t have an unusually large credit card bill.
4) Use it or lose it: Some of your benefits—like vacation days or a medical or dependent care flexible spending account (FSA)—expire at the end of the year. Take stock of what you have left and use these benefits to your advantage. MORE FOR YOUPPP Loan Forgiveness Application Guidance For The Self-Employed, Freelancers And ContractorsSBA Approving Economic Injury Disaster Loans (EIDLs): What You Need To KnowWhat You Can Do Now To Maximize Paycheck Protection Loan Forgiveness
5) Make any last charitable contributions: December 31st is the last day your charitable contributions can be deducted on your 2020 tax return. If giving to charity is a part of your spending plan, you can use these questions to help make the most of your charitable giving.
6) Pump up your 529: Just like charitable contributions, contributions to your 529 college savings plan must be made by December 31st to count for this tax year. Find out if your state is one of over 30 that allow you to deduct your contribution. You can find the specific deduction here. If your state is one of the four that allow an unlimited deduction, keep in mind the yearly gift-tax and super-funding rules.
7) Max out your 401k: While you have until April to make contributions to your traditional IRA, Roth IRA and HSA, you can only contribute to your 401k through December 31st. So, if you have extra cash and are looking to boost your savings, consider contributing your last couple of checks entirely to your 401k. Business owners can do the same with the employee portion of your Solo 401k contributions.
8) Find your tax return: You’ll be doing your taxes before you know it, so use this time to get prepared. Review last year’s return and make a mental list of records you’ll need to assemble. Year-end is also a good time to decide whether a Roth conversion makes sense for you.
9) Review your business structure: Evaluate your business structure and the QBI deduction to identify any changes you need to make to your business. You might want to set up a solo 401k, for instance, and if so, you’ll have to act before December 31st (although you can make employer/profit sharing contributions up to the business tax filing deadline).
10) Defer income and incur expenses: If you’re a business owner, you may also want to look at ways to defer income into 2021 or pay for business expenses you anticipate for early next year. This is any easy way to reduce your tax liability for 2020. However, remember not to spend money on business expenses that you wouldn’t otherwise incur just for a tax deduction. Spending a $1 to save 24 cents still costs you 76 cents.
11) Will and trust review: The end of the year is a good time to take stock of changes in your life—like getting married or divorced, having children, starting a business or retiring. Your estate plan should reflect these changes. Get out your will, documentation for trusts you’ve established and powers of attorney and make sure they match your current situation.
12) Insurance documents: Insurance documents also need to cover your current situation. Take a look at your life and disability insurance policies to make sure they protect your current income and those dependent on it. Your renters or homeowners insurance should cover any additional big purchases you made during the year. And lastly, you should review your health insurance policy for any upcoming changes for 2020. For those of you enrolling in the Market Place, you have until December 15th to pick your plan.
My last bonus task is to enjoy this holiday season. I love the holidays because you can reflect and appreciate what you have. We’ve been tested a lot this year, living our lives through a pandemic, racial unrest and a contentious election. I hope the end of the year brings you comfort and peace. Follow me on Twitter or LinkedIn. Check out my website.
As both a tax attorney and a CERTIFIED FINANCIAL PLANNER™, I provide comprehensive financial planning to LGBTQ entrepreneurs who run mission-driven businesses. I hold a special place in my heart for small-business owners. I spent a decade defending them against the IRS as a tax attorney and have become one as a financial advisor. It’s a position filled with hope and opportunity. It gives you the most flexibility to create the life that you want. I also understand the added stresses of running a business while being a person of color and a part of the LGBTQ community. You may feel like you don’t have access to the knowledge that others do. I’m here to help lift some of that weight from your shoulders.
✅Read about it here ➜ http://bit.ly/37nHXf8GoDaddy ⏰TIMESTAMPS⏰ 00:16 – Audit your website (demo) 03:03 – Get your finances in order 04:28 – Look back on your marketing efforts 05:40 – Review your social media accounts 06:34 – Review your local listings 07:32 – Evaluate your conferences and groups With another year skidding to a close, it’s time to get started on those end-of-year tasks. You spend all year running your own business, now it’s time to get things in order. To make it easy, we’ve compiled this list. 1. Audit your website Turns out, your clients don’t like static websites — which is why the most effective sites are those that are watched and updated regularly. Here are some things to check. -The basics Look at your website as if you had never seen it before and know nothing about your business. Is your navigation clear and intuitive? Is there a Contact Us link on every page of your website? If Contact Us triggers an automatic email, review the email content. Are your social media buttons in the same place on every page? Is all site content up to date? Delete, revise or refresh as needed. -Make sure it talks to search engines Search engines like Google are your best friend since future clients will use them to find you. Search engine optimization is the process of increasing the quality and quantity of website traffic by increasing the visibility of a website or a web page to users of a web search engine. Learn how to make them pay special attention to your site, by utilizing keyword research. It’s well worth the time and effort. -Conduct a website performance test Most performance tests measure two things: resource loading and page speed. Together they constitute a huge pain point for clients in every industry if they don’t perform well. But you won’t know it’s a problem if you don’t look. -Do a security check With Google’s transition to HTTPS everywhere, an SSL is imperative to keep traffic coming. Beyond that, you’ll also want malware protection and possibly backup services (if they’re not already included in your hosting plan). -Consider starting a blog Blogging is a proven way to generate new leads for your business. By publishing helpful articles on topics of interest to prospective clients, you can reel in people who otherwise wouldn’t know about you. Linking back to your website in each post brings them in the digital door. 2. Get your financial house in order Prepare for your annual meetings with your tax accountant, lawyers or consultants now before the first flakes (real or synthetic) fall. Don’t wait to send bank confirmations, especially if your business has a December 31 year-end. Be sure to file an annual report if it’s required in your state. If you do have to file, do it before the end of the year to avoid late fees. Then, prep for end-of-year financial reporting. 3. Look back at the year’s marketing efforts There’s often a lot of enthusiasm when it comes to trying new marketing tactics. Banner ads! Link building! But with all the other hats you wear, it’s easy to forget to look back at what worked, what should be shelved, and what should be kept and improved. – Tally up what you spent You’ll need this for your taxes. This will also serve as a starting point for next year’s budget. – Clean up your email list This will not only endear you to the universe of weary email users, but it will also keep you off email blacklists. Not to mention with General Data Protection Regulation (GDPR), this is a must to make sure you’re in compliance. – Social media it up Social media is uniquely effective in growing a business — unlike other forms of marketing, it’s a two-way conversation. You can interact with and actually learn from clients. What do they love about what you’re doing now? What could do to serve them better? – Review your local listings Local business listings are often the first search results to appear when someone Googles a term like “car insurance,” “IT troubleshooting,” or “tax return prep.” Make sure your address, phone and hours are up to date in all listings. – Evaluate professional conferences and groups Start checking out dates, renewing memberships and making reservations. Apply for one or two speaking opportunities to build your professional reputation. Don’t wait until your accountant starts sending frantic emails or for contractors to ask where their 1099s are. Use this year-end checklist for professional service firms, then set aside an hour or two each week to check a few more things off the list. Come New Year’s, you’ll be glad you did. Watch other videos: https://bit.ly/30nBpJ8 Subscribe on YouTube: https://www.youtube.com/user/godaddy?… Website: https://www.godaddy.com Facebook: https://www.facebook.com/GoDaddy Twitter: https://twitter.com/godaddy Instagram: https://www.instagram.com/godaddy#smallbusiness#business#entrepreneur