Haul out the Holly!
Haul out the holly! Put up the tree! Deck the halls! Tis’ the season for some fa la la’ing! To say it wouldn’t be a complete calendar year without the holiday season isn’t an exaggeration. Sparkling lights, Santa suits, and tree lighting ceremonies abound this time of year as a not-so-subtle reminder that Christmas, Christmas time is here!
The end of the year is also a time for reflection on the past twelve months, time for tying up loose ends, and time for setting goals for the New Year ahead. What lessons have been learned this year? What accomplishments were made? What lies ahead? There are several things that can be done before the end of the year wrap-up. Some things will help your credit, some will help your business, and some that will get things off to a good start for next year.
Checking in on your credit
The holiday season is a popular time for making bigger-than-normal purchases on credit cards. Online shopping helps streamline gift giving, virtual carts get filled with groceries, and holiday travel at the push of button all account for millions of consumer-driven electronic purchases. For some, racking up credit cards this time of year can be costly, especially with identity thieves or disrupted credit scores. Now is a great time to check in on your credit, ensure nothing has gone awry, and track spending habits to keep things within budget. Many banks and service providers provide free credit scores and the option to enroll in credit monitoring to prevent would-be thieves from making big purchases without you knowing. Keeping your credit habits on track, free from intruders, and in a safe e-commerce environment makes the season brighter.
Incorporating your business
Why incorporate your business before the year-end? There is a lot of confusing information out there surrounding timing for company incorporation and each December, many business owners ask whether they should hurry to incorporate their businesses (or LLC’s) before the close of the current calendar year. While incorporating is a personal business decision, a couple of facts may help put the tinsel on your LLC tree. First, if the business is already up and running, the primary benefit to incorporating immediately, rather than waiting until January, is protection of personal assets. By incorporating your business now, you can separate your personal taxes from your business taxes and this will likely prevent you (the owner) from having to pay personal taxes in a higher income bracket. Additionally, owning your own business but not registering it with the state means that you file as a sole proprietor and requires expensive self-employment taxes, up to 15.3% of earnings to cover social security and Medicare. As a corporation or LLC, you no longer pay self-employment tax on any profit that remains in the company income. You can save yourself a lot of trouble and money by choosing to form the LLC before the end of the year.
Setting financial goals for debt
To set yourself or your business up to start the New Year strong, pay down (or off) debt now. Although it doesn’t sound like fun to use holiday money for paying off debt this time of year, what better way to start the year with a cleaner slate than with less money owed to others? High interest rate credit cards are bah-humbugs as credit lines grow because payments get bigger and the debt relief gets smaller. Organizing debt by the highest interest rate and transferring the balance to a lower (or no) interest rate card, can help make payments smaller and pay off the debt more quickly. Buying and owing are easy, but repaying is hard, so only charging what you can afford to pay when the bill arrives, tracking charges, and managing cash flow will help you to meet your financial goals for debt.
The holidays can be a festive time of celebrating, gift giving, and togetherness. Getting prepared with smart strategies can help you get off on the right foot in the New Year. With the spirit of the season upon us, we want to let our friends, family, clients and colleagues know how much we appreciate all of you! Happy Holidays! See you next year!
By Susan Amsler
December 15, 2018
Randolph Business Resources, LLC.
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