Together with the coming presidential elections, market volatility, and a pandemic, it could be challenging to make sense of everything. In case you’ve been wondering how current events may impact your financial life and taxation preparation, you aren’t the sole one.
Bearing that in mind, below are a few financial planning considerations for business owners through these uncertain times.
What has happened so far, and what exactly does this mean to you?
How can your taxes become affected during and after the election season?
Looking back in history can provide you a good idea of what you can expect shortly. Typically you can expect to see that the incumbent using executive orders and fiscal policies to decrease taxes for people. And due to Covid-19 this season, we saw an increase in the public use of government financial aid and business loans via stimulus packages and applications such as the Paycheck Protection Program.
Due to the payroll tax reduction, credits, and loans, you might have increased money flow, but will this last? Though right now you may be seeing artificial inflation of your cash flow, as we enter a new presidential term, cash flow will likely tighten, so it’s time to anchor house plate.
What does it mean to anchor the house plate?
It means to establish a budget, keep track of costs rather than make any significant purchases. As a business owner, it is essential to be forward-thinking and come to terms with your financial plan after the election. Track your loans and debts and make sure you have budgeted to pay them off. And keep building your business and financial riches while consumer spending tendencies up as many people continue enjoying the benefits of their own artificially inflated budgets.
Consider your own taxes
Taxes will need to increase to cover the reduction in taxes that business owners just like you have been profiting from last year. Additionally, but tax credits to keep individuals on your payroll could be more difficult to come by.
If a new president is chosen, this president will champion their own policies based on the matters they think in. But no matter who wins the election, then it is possible to anticipate adjustments to your budget because it’s likely tax laws are going to change during the upcoming period.
If you are proactive in earning money, frugal in spending money, and conscious of your ability to pay all debts, then you may save yourself money, time, and headaches. Be certain that you meet with your tax advisor or financial advisor to plan and create a plan that is appropriate for you and your business.
The advice provided here is not investment, tax, or financial advice. You should consult with a certified professional for advice concerning your specific situation.