Next weeks brings us to Memorial Day, the unofficial start of summer. This is a time when many of us turn our attention to winding down and potentially relaxing a bit more, but this is not always the case, and sometimes the things people do this time of year come with tax consequences.

For some people, this season can actually involve working more. Kids who aren’t in school for these weeks may be trying to bank some money before returning to the classroom. They don’t want to end up with a surprise tax bill when it comes to time to file a return next year, though. If this is the only money they make for the year and they are being paid as an employee, then regular withholdings from their paycheck should account for all they owe. If it’s just a part of their income for the year, though, it could be worth the few minutes it takes to use the IRS’s withholding estimator and see how they should enter their withholding.

This forward thinking can be even more necessary if one is doing work as a contractor and/or in the gig economy. This can be a wonderful way to make some extra money with greater time flexibility, but one must keep in mind that it is money being earned without being taxed. This doesn’t mean it’s a bad way to make money, it just means that one must plan accordingly, and thus it becomes another of those summer things to potentially keep in mind.

Much like the fact that if you are sending kids to camp over the summer, keep those receipts for they might help come tax time.

Something else people do more often over the summer is get married. And of course, there are the obvious tax implications here of whether one files a tax return as single or married. There are a lot of other pieces involved that also may need to be attended to, though. For example, if there is a name change involved, the Social Security Administration needs to be notified. If there is an address change involved, that should be reported to the Postal Service, IRS, and employers.  Making sure everyone has the correct information now will make it easier when it comes time to file taxes.

The best thing that can happen over the summer, though, may be actually getting in that bit of that time to relax. So here is to hoping that the season treats you and your family well, no matter what you decide to do with it.

Warmly,

Josh Bousquet
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Last week we talked about some leftover ideas from National Small Business Week. I implored readers to not hesitate to contact us if there were any questions we could help with concerning the running of a business. In retrospect, I realize that this might be a bit too daunting for those contemplating starting a new business. Because after all, where do you even start?

So this week, let me give you a little bit of an idea of where to start. This link will take you to information the IRS gathered as part of National Small Business Week. This could be a spot that will give you some idea of how to start or at least the right questions to ask. And again, if you need to ask them, you know who to turn to.

I did want to single out one piece of this, though, about the importance of making estimated tax payments. This may be the biggest mental shift that people must make when starting a business. It is also possibly the most dangerous one to not make as early as possible.

For most of us, our first interaction with taxes is when they are withheld from our paycheck in our first job. And most of the time, there is enough withheld there that when we file our taxes without worry, and we often even end up receiving a refund because we paid too much. And this can often continue like this for years – what a deal!

Eventually things may get complicated enough that we must address our withholding to cover tax obligations, but if you stay on top of this, it can always be weathered. When you start a business, though, this becomes a little more complicated because there is not necessarily any money automatically being paid to the IRS and if that number is high enough, the agency is even going to be expecting estimated payments.

Furthermore, this can still be the case even if the ‘business’ you want to start up is a joining the gig economy. When you do that, you will be receiving money and it feels great as it enters your bank account, but no taxes have been paid on it, and that money is going to count as income and be put on top of whatever else you have earned during the year when it is time to file your tax return.

So here then is a very specific question you may have. And if you do want some help determining if you should be making estimated tax payments (and how much they should be), then now you know what to ask us.

Warmly,

Josh Bousqet
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You may have heard that last week was National Small Business Week. And I didn’t hype it up in this space because, well, that’s the kind of stuff we do all the time. It is not necessarily a bad thing to set aside specific time to give extra attention to important things, but it is a better thing to pay attention to them all the time.

So maybe waiting a week makes anything I say here take on a little more importance because we don’t have to only talk about these things when the calendar dictates it. And one very clear reason for this is we are a small business ourselves. We have either been where you are or understand where you are. No special week required.

At least partially tied in with that is an urge to see small businesses succeed.  On the surface, some of the work we do is (seemingly) easily understood and just takes away some tasks from a business owner. Beneath that, though, what we do can be used to go further and provide information that can help a business pinpoint different ways to thrive. No special week required.

A lot of times this moving beyond the obvious comes from needing that outside look. No one starts a business and understands all the aspects of running the enterprise. Help will be needed from outside people with expertise in areas where you do not have it. And we provide value by giving that and then potentially moving to things you didn’t even think we could do. No special week required.

So yes, we do want to celebrate small businesses, but we want to celebrate them all the time. And this covers a large spectrum of cases – from those who are just contemplating how they might enjoy starting a new venture to those who may be on the verge of no longer just being a ‘small’ business. We enjoy it all.

This then comes with the hope that it can spur some conversation. Again, this can run the gamut from how you can start a business to how we can help your growing business thrive. We cannot promise to have answers to everything, but if you think it’s a conversation worth having with us, that means we can probably at least point you in a good direction to get the answers you want. And again, these can happen whenever. No special week is required.

Warmly,

Josh Bousquet
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We are less than a month removed from tax season, which means that we have recently spent a lot of time talking about planning and how it can help you avoid surprises. This week, though, I wanted to write a little bit about the surprises that you can’t do much about, and how planning even helps with those.

These thoughts occurred to me when I saw a Forbes article musing on whether the increased amount of people working from home would hurt city budgets. I won’t get into the minutiae of what the article says here, for the premise is obviously sound enough to at least warrant thinking about (and dare I say some planning).

From there I started to think not only about the budgets of the city themselves, but what about various shops and restaurants located in (what were at least once) areas saturated with businesses. And simply, once there are less people frequenting the area, that is less potential business for those establishments.

That is one of those types of surprises that could not have been planned for. One would have to possess some mystical level of clairvoyance to have predicted the pandemic, the increase of work-from-home situations, and calculate numbers of how that would look for businesses.

If one had already been doing general planning, though, then your books would have been in good enough shape to be make some reasonable general estimates. And from there, you are in a better position to realize when such unforeseen circumstances start affecting your business and can combat it as early as possible.

I am not writing with any actual answers to such a situation here. I am not even saying that every situation like this would have potential answers. Surely there were businesses so affected by what happened over the last couple years that saving things was impossible. What I am saying, though, is that planning – and the state you must keep your books and knowledge of your business in to be able to do so – will at least give you an opportunity.

Because even now when things have achieved some sense of normalcy, the ideas we are imagining involve situations where its effects will continue to trickle into the future. So one must maintain some vigilance, never think that all storms have been weathered, and remain in a position to see problems while there is still time to react to them. And as always, if there is anything we can do to help you get to that space, let us know. 

Warmly,

Josh Bousquet
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