Planning ahead for your finances can save you stress down the road, and ensure the success of your personal and professional goals. Outlining a monthly budget is one of the most effective ways to both organize your finances and chart your progress. The following guideline offers some helpful suggestions to stay organized and motivated as you chart your financial future.

The Importance of Setting Up a Budget
Assessing the amount of money you earn every month after taxes is the first step toward setting up a reliable budget. Next, you should determine how much is needed to satisfy monthly bills and necessary living expenses. Setting up a budget will go a long way toward helping you accomplish your financial goals as you streamline purchases.

Splitting your monthly income into three categories is a popular budgeting method. Under this system, half goes toward absolutely necessary expenses like housing, transportation, utilities, and food, 20% covers retirement and debts, and the last 30% is spent on personal expenses, such as entertainment, personal care, or charity, to name a few examples.

As far as personal purchases are concerned, you should really weigh the overall value of what you’re spending money on. Is the purchase an impulse? Does it benefit your daily life in any way beyond instead gratification? One popular sentiment many apply to their spending habits is the idea that memories are more valuable than individual material goods.

The Big (and Small) Picture
As you establish your financial goals, it’s helpful to organize a plan that addresses each goal in smaller, bite-sized installments. We can easily overwhelm ourselves with long-term goals, so assessing what can be realistically accomplished within the near future may ensure long-term success.
Along with drawing up a budget, creating a financial calendar will help organize your tax schedule, whether you have upcoming appointments or need to remind yourself to pay quarterly taxes on time. This visualization can also help you track long term goals through smaller, more immediately achievable tasks, while also allowing you to track your current status. Knowing where you stand will help you stay current on financial goals. Tracking your net worth can also prevent the resumption of bad spending habits and stop current ones in their tracks.

Making the Most of that 20%
The simple act of listing your debts will help you form a plan of attack. Focusing on interest rates instead of what you owe will allow you to effectively prioritize the payoff of individual debts. The bill with the highest interest rate is costing you the most money, so it should take top priority on your list. Once that debt is paid, apply the same method to the next item.

Even though we are barely beginning the holiday season, it is already time to start preparing for April 15th. You most likely are focusing on filling out the 1040 and related forms, the general information the IRS asks for. However, what if you rent out a guest room to a tenant, or you make decent money through gardening work on the weekends? If so, income from these might not simply be written down on a box within the 1040. Instead, you might have to fill out a Schedule C or Schedule E.

Schedule C is a form that reports income for any self-employed individual. If you are the sole proprietor of your business (even if it is a single-member LLC) or an independent contractor, you need to fill this form out. Sadly, since you won’t have a boss that writes your own checks, you don’t have the opportunity to have taxes taken out for you; you have to pay the full taxes of your income. That being said, claiming any and all genuine business expenses on your Schedule C will reduce the amount of income that is taxable. Make sure that you gather as many receipts for your business expenses as you can.

Schedule E is the form for certain types of supplemental income: income from rental properties you own, any royalties you earn, and income reported on a Schedule K-1 (from partnerships or S corporations) are some of the more common examples. If, however, income from multiple rental properties is your primary form of income, you may have to use a Schedule C for your sole proprietorship instead. In addition to income, a Schedule E is also used to report business losses (paying for an apartment’s carpet replacement, for example) and helps prevent you from paying too much in taxes. This only applies to “at risk” situations, which is not necessarily the same thing as the total money lost.

When it comes to taxes, honesty is always the best policy; if you run your own business or rent a room to someone, and that income is at least the minimum taxable amount, you will need to fill out a Schedule C or E, respectively. Filling out these forms do not necessarily mean that you will be paying too much in taxes, nor does that mean that you won’t be able to make up for these taxes either. If you see yourself filling out either Schedule, feel free to contact your trusted tax preparer or accountant to discuss these forms. When tax day comes, being prepared for Schedules C and E can save you time and, possibly, money.

How to expand your business- Congratulations on successfully starting your business! If you’re ready to take the next step, but don’t know exactly how to go about that, here are some ideas for thinking about growing your business. Depending on the industry your business is in, and the type of business you own, the available resources, time, and money on hand, will determine the proper idea or ideas that is right for you and your business.

Open another location – If you’re first business location is successful and under control, consider expanding by opening a new location. Look for specific areas in which your customer demographic prevalently frequents or is well known.

Collaborate with other businesses – By opening yourself up to another business that is similar or related to your own industry, take advantage of that network relationship and collaborate on a joint event. It’s a chance to market yourself to new customers that may have not known of your business.

Diversify your product – Look into seasonal voids, is there a product similar to your own that can be introduced? Diversifying is a great way to increase sales and profit margins. Seasonal or complimentary products or services, or offer to export other colleague’s products.

Turn your business into a franchise – If your business model is easily replicated, and you want to see your business grow quickly, think about franchising. As the owner, now referred to as a franchiser, of the name or trademark sells that right to a franchisee. However, be prepared to work through various regulatory and legal rules and obstacles when it comes to franchising your business. Look into the federal government rules, as well as state requirements, in order to sell your business.

Expand to the internet – In this digital age, it’s important to have a superior online presence to maximize your exposure to new and old customers. Look into creating a website so customer can discover your business through an online search engine.

Understand your limitations, resources available, and your capacity as a business owner before looking to grow your business. However, with a successful business plan, market savviness and dedication, there is always room to grow!

Whether you run a small or large business, having a reliable individual perform financial duties can help support long-term success. An experienced Chief Financial Officer, or CFO, can help your company by executing many important tasks, such as financial analysis and budgeting. However, employing a CFO year-round can be costly, especially if you are responsible for a smaller enterprise. Outsourcing CFO services free up potential burdens while providing all of the benefits associated with their work, including:

Save Money on Payroll

While having a CFO on your team can help run your business effectively, the cost involved must be taken into consideration before you increase your office personnel. Hiring a full-time CFO means accounting for a six-figure salary, which can be difficult if you’re running a small business. The money you save can be put toward expansion instead of financial upkeep, which can just as = easily be provided by a qualified outsourced professional.

Help you Manage Your Time

A small business owner easily becomes distracted by other duties, especially if they take on several roles within their companies. If your time is largely dedicated to the organization of financial data and related tasks, other responsibilities that can influence the success of your enterprise loses priority. An outsourced CFO can handle duties such as bill payment, paperwork, profit analysis, and other important elements that allow you to focus on the business end.

Provide Objective Service

Having a part-time CFO helps cut down on potential risks associated with juggling too many responsibilities within your company. These distractions can lead to an operation that is vulnerable to both fraud and theft. Outsourced CFOs provide objective analysis, with plenty of experience with day-to-day duties and insight that help with long-term planning and goals.

Schedule Your Consultation for Outsourced CFO Services Today!

If you need part-time CFO services in {city}, including business planning, tax strategy, and financial forecasting, contact Kristi Hattig, CPA at {company_name} today to schedule your consultation. As a former controller and CFO working with non-profit organizations, Kristi can provide objective guidance that is effective and helps secure a profitable present and future for your enterprise.

 People looking to start small businesses face a daunting task. With the dominance of larger companies, global competition provided by the internet, and the increasing number of competitors within other small businesses, you may feel overwhelmed. However, these simple yet effective tips should help keep you ahead of the curve and competitive in the modern market.

1) Make Yourself Known: A great way to get your name out is through community outreach efforts, or even sponsorships of local sports teams. These efforts go beyond regular marketing efforts in that they allow local communities to know you, as well as your business, and make purchasing your goods and services personal.

2) Have a Plan: Before even starting your business, have a strong business plan that acknowledges your company’s niche, market potential, and values your current assets. This can help you in deciding a direction for your venture, and can cut back on unnecessary expenditures in the future.

3) Quality over Price: With the constant presence of corporations like Walmart and Amazon, trying to price match competitors can lead to a loss of profit, as well as confidence. Instead of trying to compete fiscally, focus on honing your service in a way that these companies cannot. Not only will your product benefit from your drive for excellence, but patrons will overlook price differences for superior quality products and service.

4) Acknowledge Missteps: Nobody likes to be wrong, but being able to accept flaws in your business’ model or your product are essential in setting yourself apart from your competitor. Accept criticisms as opportunities to improve. Adaptability is essential in the modern marketplace.

5) Use Technology: With the internet and technologies focused on the management of small businesses, the barrier for marketing and sales in greater regions has more or less been lifted. Be sure to use all of the resources at your disposal, whether this means creating a web-based storefront, or managing your accounts with programs like QuickBooks.

While these strategies are just the tip of the iceberg in terms of establishing a successful business, they are helpful in getting your business a leg up over the competition.

If investing in your future is something that rests entirely on your shoulders, know that there are options. If you have employer-sponsored plans like 401(k)s, it’s imperative to that you properly optimize that plan to its fullest. But saving for retirement is a process, and its best to understand your avenues even if you’re just starting out. So here are some tips on how to start preparing for retirement.

– Consider maximizing your contribution which is matched by your employer in the 401(k) program at your company. In some cases you could get a 50 percent return on your investment. By having the money taken directly out of your paycheck, you have an easier time saving money without really thinking about it. If you match your contribution and had a direct deposit set up to add more, you will be on a good path towards affording retirement.

– Consider opening a Roth IRA or Roth 401(k) account with an investment firm. There are tax differences between the two, so it is important to discuss the pay taxes now vs. late discussion with an advisor or tax accountant.

– Look into a myRA – A singular investment option by use of U.S. Treasury retirement savings bond. This is a great option for those who do not have a 401(k) account at work, but have dispensable income. The myRA is convenient in that it accept smaller contributions, with low-balance fees and a higher interest rate than a savings account. Contribute your next tax refund, payroll deduction, or a deposit from a checking or savings account. You have options in size, just know with this plan that once you save $15,000, the money must be rolled into a private Roth IRA.

Start saving and keep saving! Whether you’re saving for retirement or for another goal – don’t give up. If you’re just starting to save, start small and try to increase the amount each month, know you’re options as you get into more opportunities to save more money for that end goal.

Preparing for end-of-the-year taxes can be daunting, but understanding good tax-planning practices can help to increase your chances of receiving higher returns on your investments. Income from investments can be one of the best places to look when searching for places to cut costs and increase your revenue. Creating a proactive tax-plan can prevent you from paying thousands of dollars in unnecessary taxes.

Tax-saving Solutions
While high-income tax payers are required to pay the most income tax, there are a few practices these individuals can engage in to lower the amount they pay at the end of the year.
Purchasing stock for at least one year prevents you from paying additional costs from unnecessary taxes. Allowing your stock to become eligible for long-term treatment helps to reduce the amount you pay in taxes. Failing to hold stock for at least a year causes you to pay short-term capital gains on investments rather than just the 15 to 20 percent of normal capital gains tax, in short paying more.

Regular reviews of your taxable assets makes sure you’re aware of all the areas that may be costing you extra money. Routine checks develop good practices and habits that help to reduce what you pay.

Reduce the amount of taxable interest, which means reducing amount of money stored in low-profit areas. Banks give their clients close to nothing, while clients are still required to pay at least half of that interest in taxes. Utilizing high-profitable places to store you money will not only increase your dividends, but also reduce the amount of taxes you pay.

Give away assets, that is, giving or donating assets to charities and family members using appreciated stock, may reduce the amount of taxable income you own. Neither party associated in the exchange is required to pay capital-gains taxes when the stock is transferred. Additionally, family members may be qualify for a different tax bracket that are lower than your costs, in turn reducing the overall amount of gains lost through the process.

Since the New Year is just around the corner, it’s best to engage in proper tax-planning practices to best increase your chances for reducing the amount of money you pay and increase the amount of profit you actually keep.

April 15 is a stressful day of the year, and especially when attempting to cram in months of tax preparation in a few days. If receipts and records are not well-organized, keeping track of deductible expenses grows increasingly difficult. This limits the size your return, or can even cause you to pay taxes incorrectly, which incurs liability that the IRS can penalize. A stressful tax season is entirely avoidable, but it requires time, effort, and planning.

Keeping Records for a Successful Tax Season
Detailed records, either physical or digital, is beneficial when it comes to successfully submitting your tax payments. Invest in organization for you receipts and records, either with a physical filing cabinet, or web-based resources. Online services such as QuickBooks are available to digitize all records and to make financial transactions accessible 24/7. Records are important for they keep individuals and small businesses aware of their cash flow and tax deductible items that will save money each April.

Stay Up-to-Date on Tax Code
Tax law changes frequently enough to affect how much an individual owes the state or federal government. It’s easy to stay on top of these changes by attending free classes in your community, doing online research, or speaking to a tax professional. Keep abreast of the changes to avoid surprising bumps in taxes owed, and doing so on a regular basis will ensure year-long tax prep success. Quarterly reviews of your taxes are recommended to make sure your information is accurate.

Hire Tax Professionals
The hardest part of preparing for taxes year-round is doing so while managing other areas of your life. Taking control of tax preparation ties up your time and energy that is needed elsewhere. Our affordable services will grant peace of mind, financial stability, and precise tax preparation for year-round success. The tax code is infamous for being complex and challenging for most individuals, but professional help can untangle your tax complexities and enable you to receive the return you deserve. This will keep your finances in check and ensure that the IRS doesn’t follow up with audits or penalties.

Many business owners and taxpayers are accustomed to the idea of “reactive” taxes. In this style of filing, you make your various expenditures throughout the year, see your company’s sales and expenses, and determine how much you owe at the end of the year. However, this form of filing often leads to business owners owing more in taxes. As a result many accountants work with businesses to curb the amount you would owe during tax season.

Why engage in Proactive Planning?
Proactive tax planning allows a business owner to limit tax liability by working within the various state and federal tax laws. Not only does this approach save business owners money, but allows your accountant more time in finding the best deductions and tax credits each year.

The tax landscape is always changing, and implementing an effective tax plan can also help to ensure that your business’ books are kept up to date. This continuous knowledge of the state of your business and the developing tax laws can also help you find beneficial reductions to how much you need to pay.

Business owners looking to expand, incorporate, or otherwise change their business model during the year are especially well served by an adaptive tax plan. This way, you will be able to account for the change in your company and can have a strategy in place to mitigate the corresponding differences in the tax code.

How to start your Proactive Tax Plan
The first step in planning for the upcoming tax season is to find an experienced accountant or CPA. Hiring a professional will allow you to keep your attention on your business ventures, without needing to focus too much on current tax laws. Additionally when creating your tax plan, it is always beneficial to allow your tax professional to assess the current state of your company to strategize a savings plan.

If you have questions about tax planning or are looking for a strategy that is tailored to your specific income or business, contact our firm today.

New business owners face a number of obstacles when it comes to making their venture profitable and cash soluble. At Kristi L. Hattig, CPA LLC, we are committed to helping businesses achieve and maintain success through individualized accounting solutions.

In an effort to help you avoid making mistakes with your taxes, our Longmont firm has made a list of the most common accounting errors, and tips on how to avoid them.

Using a Personal Bank Account

One of the earliest errors you can make as an owner, member, or shareholder, is failing to separate the personal and business accounts. Personal accounts when used to make business expenditures are harder to track, as they must be taken as an individual transaction, instead of being tracked through bank statements.

Additionally, if personal funds are used to pay for company expenses, the owner of the account can find themselves personally liable for the debts of the company, even if the business itself is not a sole proprietorship. By opening a separate checking and savings account for your business, you can prevent missing out on potential tax deductions due to poor tracking of your expenses as well as limit personal liability.

Keeping Physical Records

With modern technologies, business owners no longer need to keep a shoebox filled with receipts to keep track of their records. At Kristi L. Hattig, CPA LLC, we can train you and your team to operate QuickBooks, maximizing the efficiency of your accounting and bookkeeping. With QuickBooks, business owners can scan and keep digital records of receipts, creating an archive of all of your expenditures whenever they are needed.

While digitized records are more spatially convenient than physical records, they also allow for an infinite number of backup files and reproductions. Should you find your local files deleted or lost due to computer error, a backup using an external hard drive or cloud based storage will allow you to recover them easily.

Not Hiring a Professional

One of the most common issue among first-time business owners is not knowing when to bring in an accounting professional. If your business is growing, but you aren’t seeing a corresponding increase in profits, a CPA can help to examine the overhead costs of your company, supply chain efficiency, and outstanding accounts receivable to ensure that your company maintains a positive trend in cash flow. Additionally, if your business’ continued growth requires the hiring of employees, remaining compliant will become more difficult, taking away from your ability to run the day-to-day operations of your business. Certified accountants like Kristi Hattig are able to alleviate these concerns, allowing business owners the ease of mind to run their company.

If you have made one of these common accounting errors and or are looking to start a business, contact Kristi L. Hattig, CPA LLC. We provide accounting solutions tailored to the individual needs of businesses in Longmont, Loveland, Boulder, Lafayette, and the surrounding communities to limit your liability, and help you see long-term profit growth. Schedule your consultation today.