Even though we’re in the midst of tax season, and the office is buzzing right along, I’m always surprised at some of the calls and emails we field this time of year. Sometimes, it’s logical – questions like, “How should I break down my automotive expenses: Weekly, monthly, or can I just lump them all together?” Or, “With the new house, what documents do you need me to send to calculate all that tax stuff?”
Easily 85% of my clients are asking smart questions, worried they might have missed some key piece of information me and the team will need – and I truly appreciate this attention to detail (you have NO idea how much time it saves us, even if some of what we see if superfluous or a little too detailed)!
Ironically, though, every year, we see a lot of questions trying to verify how – and how much – a client’s contributions to retirement accounts can be, and when the final day for those contributions is.
I’ll be blunt: Pretty much everything ends on December 31st EXCEPT the various IRA structures. Contributions to those must be done before April 18th this year.
The lesson in that? You’ve got to have a plan for contributions, especially the ones that end with the physical year. Bigger than that, though, is the fact that every business owner should have this type of knowledge locked down.
I’m not going to beat up anyone who isn’t sure about these things, but I am going to say this: Without a plan, you’re constantly reacting, and that reacting, in this case, could be causing you some serious heartbreak.
Here’s why things like this are so important, and it’s deceptively simple… cash on hand is cash that’s going to get wasted. Think about it! If you’ve got an extra $3, 4, or $5K sitting on hand around the holidays, you start thinking about a little extra “treat’ for the family. Around Tax Day? You worry about what you might owe, so instead of locking it into an IRA, you hold on to it, then inevitably it’s got to go into the current year and not last year.
…And that’s another year that’s not fully max’ed out on your contributions!
The easy button in all this is simple: know what you need to know, but also? Set times to meet with me and the team and ensure you’re on track, your contributions are on track and your quarterly payments are on time. The good news is when you do this, there aren’t any surprises and there aren’t any overwhelming costs. You pay the Tax Man and you pay yourself at the same time. Quarter by quarter, year by year, and your assets and accounts continue to grow.
Don’t let 2023 get away from you – go ahead and schedule a call with us – especially once tax season is sorted – and let’s keep on track.