Financial Changes that will Change Your Life

People set all kinds of goals and make all kinds of plans for how they will improve themselves, financially speaking. And, while people tend to be good at setting goals, not everyone is so good at keeping them.   

If you’re having trouble keeping your goals, maybe it’s because you’re not making the right ones. The key is to choose manageable goals that are actually doable, rather than huge ones that leave you feeling overwhelmed and, ultimately, like a failure.

In the spirit of setting the right goals, here are some “small but mighty” ones you can try.

Set and Stick to a Budget

One of the best things you can do for yourself is to set a reasonable budget, one that has you spending less than you earn, and then stick to it. While you can come up with this budget on your own, it’s a really good idea to have a financial professional write one up for you.

That way, you can not only set your budget, but you can make a smart plan about what to do with the leftover money. Whether it’s socking the extra away in savings or investing it, you’ll be setting yourself up for a bright financial future when you get serious about this goal.

Pay Down Your Debt

A lot of people live a huge chunk of their lives with crippling debt.

If you don’t want that to be true for you, develop a plan for paying down your debt. Whether it’s credit card debt, student loans, or anything in between, finding a solution to start getting out from under your debt can lead to great freedom.

You can do this by speaking with a financial adviser and coming up with a plan or even by working with your lenders directly. Even if it takes awhile to pay off your debt, you’ll feel so much better once you do!

As you can see, goals don’t have to be huge. In fact, small goals have a much greater chances of getting accomplished and of having the desired impact, which is to change your life for the better.

What You Need to Know about Employee Expenses

If you own a business and have employees, then there is likely a good chance that you regularly reimburse your employees for spending related to their jobs. Unfortunately, though, many smaller businesses aren’t as strict about following up on these”re-fundings” and ensuring that they are

legitimate as they should be. To really be sure that you are not overspending and that you can trust your employees, you should require proper identification and proof, such as receipts, of all funds that you reimburse.

 Though this may be a difficult thing to enact, it will benefit your business and make it much easier to prove your employee expenses come tax time. In addition to careful tracking of employee expenses, it is also wise for business owners to consider placing a cap on employee expenditures.

Eliminate Costs Where You Can

One thing that can help you to save money on employee expenses and to make your expenses appear more credible to the IRS is to eliminate any unnecessary spending when possible. Obviously, if you have your employees traveling, you need to be able to pay for their travel, lodging, and food while they are away. Most things outside of that, however, are not TRUE necessities.

If, for example, you cover the cost of your employees’ phones and phone plans or the cost of their pleasure outings while traveling for work, you may want to rethink that decision. These kinds of expenses can look questionable to the IRS and can also cause you to spend more money than you really need to.

While cutting off certain employee expenses may not thrill your employees, it is often a necessary and worthwhile step for businesses to take, especially businesses that are struggling financially or that are fearful of undergoing a highly scrutinous audit in the near future.

Take Deductions When Possible

In addition to putting an end to unnecessary employee spending on your dime, you should also take a close look at the expenses you are financing. There is a very good chance that many of them fall under governmental benefit plans. If, for example, you are reimbursing employees for relevant educational expenses, you could potentially get reimbursed for those expenses through tax-deductible government programs.

Your best bet is to work with a financial adviser to determine which programs exist and, then, if and how you can take advantage of them. This option provides you with a way to still encourage your employees and keep them happy without having to foot the entire bill for doing so yourself.

Capping Costs

As mentioned earlier, you will be expected, in most cases, to take care of employee necessities, such as dining and lodging. However, do keep in mind that you can control your business’ spending by placing a cap on employee expenses.

By only giving your employees a certain amount to spend on food, lodging, and other expenses per day or per instance, you can greatly reduce the number of employees that take (an unfair) advantage of your kindness and your overall costs.

While your employees may not love getting “capped” and “reduced” in these ways, the bottom line is that the tips presented here can help you to save money while still reasonably providing for those who work for you, and, at the end of the day, that is what matters most.

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The Differences Between Tax Havens and Tax Shelters

Many people think of the terms “tax havens” and “tax shelters” as interchangeable. However, while these two things are definitely similar, they re not one and the same.   

First of all, it’s important to understand what each of these things does. What they do is actually quite similar, hence the confusion. Both tax havens and tax shelters are used to legally decrease the amount of income tax people with high net worth have to pay.

How exactly they operate and what they do, however, is where they differ.

Tax Havens

Tax havens are places where the tax laws tend to be lenient. This could be a whole country, a state, or even just a little area. No matter where a tax haven is located, it typically has very low income tax or no income tax, which attracts many to open up offshore banking accounts and trusts in these areas or to form international business corporations linked to the tax haven f their choice.

As mentioned, tax havens are all over the place. However, some of the most popular and commonly used include the Cayman Islands, Switzerland, The British Virgin Islands, and Bermuda, all of which offer privacy and protection to taxpayers.

Tax Shelters

Tax shelters, unlike tax havens, aren’t really a “place.” They are more of a method, a way to legally reduce your income taxes. A good accountant can help you find various tax shelters that could work for you, like new investment strategies.

A lot of the tax shelters that people enjoy are simply about timing- filing taxes at the right time and taking advantage of windows of opportunity. Others are tried and true, like 401(k)s and IRAs or government mutual funds or municipal bonds.

The best way to learn about tax shelters that could work for you is to speak with your financial advisor. This is also a good way to learn about tax havens and other money saving options for the tax year!

Do You Need a Tax Advisor?

IRS 1040 Tax Form Being Filled Out (Photo credit: kenteegardin)

There are some people in the world who can file their taxes just fine on their own. Then, you have others who benefit from hiring a CPA to take care of the job for them. Some people need even more help than just a standard account will provide, however. Yes, there are some people who can really benefit from the pointed, expert advice of a professional tax advisor. But, how do you know if you’re one of those people?

Well, to begin with, if you are having trouble keeping track of your monthly finances, then that’s a pretty good sign you need a tax advisor. If you can’t keep tabs on what’s going on monthly, how can you be expected to turn out a report of your finances for an entire year? Advisors can get you on track both in your daily life and in terms of your taxes.

Also, if you’ve recently started making more money or have come into a large sum of money, such as an inheritance, unexpectedly, it’s wise to seek the expertise of a tax advisor, so that, come tax time, you won’t end up losing everything you’ve gotten or paying extra taxes.

There are many good reasons to work with a tax advisor. In fact, there’s really no reason not to. Hiring one today could see good returns for you by the time this tax season rolls around.

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