401K Archives - Motl Accounting

3 Easy Ways to Plan for Retirement

401K, Accountant, Accounting, expenses, IRS, Retirement

Retirement can be an intimidating prospect, especially for individuals without financial planning experience. Fortunately, there are practical steps that anyone can take to make the process easier – no matter your age and financial situation. These essential planning tips will help set you on the path towards your future as a retiree. Start preparing now for life after work!

Start Early, Save Often

The younger you are, the easier it is to save; parenthood, homeownership and other responsibilities make it harder to put money away each month as you get older.By investing earlier on in life for retirement, the compound interest on your savings will allow your money to grow more and more every year. In addition, you may be able to take advantage of employer-based retirement matching. This will not only provide an extra boost to your savings, but you will also reap the benefits of pretax deductions.

Set Realistic Goals

Retirement planning is all about setting realistic goals and sticking to them. Determine what kind of lifestyle you want in retirement, then set a budget that reflects that lifestyle and make sure that your savings plan works towards achieving those goals. Consider inflation, taxes, health care costs, living expenses and other factors when making your plans so that your money will last as long as possible during retirement.

Create A Diversified Portfolio

When it comes to investing for retirement, diversification is key. Don’t put all of your eggs in one basket by investing only in stocks or mutual funds; instead create a portfolio that contains a mix of investments such as bonds, real estate holdings and other assets that can help balance out riskier investments like stocks or commodities trading. This way if one type of investment does poorly, another may do well and help cushion the blow of any losses incurred by their counterparts.

Retirement planning is not something to be taken lightly; it requires careful consideration and long-term commitment in order to ensure financial security later in life. Start early, save often, set realistic goals based on what kind of lifestyle you wish to lead in retirement and create a diversified portfolio so that any potential losses are balanced out by gains elsewhere in your portfolio – these are all important steps towards creating a secure financial future for yourself after retiring from work life! With these tips in mind, retirees can rest assured knowing they are taking steps towards building a solid foundation for their post-work lives.

4 Financial Tips for Small Business Owners

401K, Accounting, Bookkeeping, Business Expenses, Employee, expenses, IRS, Payroll, Small Business, Taxes, Uncategorized

As a small business owner, managing your finances can be overwhelming and intimidating. There are so many things to consider, from taxes to cash flow to budgeting. Luckily, there are some simple tips you can follow to help make the process easier. Let’s look at four financial tips every small business owner should know.

1. Create A Budget and Track Your Expenses:

Creating a budget is essential for any successful business. With a budget, you can easily manage your finances and plan for the future. Plus, tracking your expenses will help you identify areas where you can save money. Make sure to track all of your income and expenses (including taxes!) on a regular basis. This will ensure that everything is accounted for and that you have an accurate picture of your overall financial health.

2. Secure Financing Early On

If you don’t have access to capital or don’t want to use your own funds, securing financing early on is key. Whether it’s taking out a loan, talking to an accountant, applying for grants or even crowdfunding, having the right funding can make all the difference in getting your business off the ground. Make sure that you research all of your options before making any decisions – this will help ensure that you get the best deal possible!

3. Keep An Eye on Cash Flow

Cash flow is one of the most important aspects of running a successful business. Keeping an eye on cash flow means staying on top of invoices and payments from customers as well as keeping track of bills and other expenses that need to be paid in order to keep operations running smoothly. Setting up automated reminders or using an accounting software solution can help make this process easier – but ultimately it’s up to you as the business owner to monitor cash flow closely and stay ahead of any potential issues with payments or collections from customers.

4. Hire Professional Help When Needed

When it comes to managing finances, sometimes it pays (literally!) to hire professional help when needed. Hiring an accountant or bookkeeper can save time and money by ensuring that all paperwork is filed correctly, and all necessary tax documents are in order each year. Additionally, hiring professionals may also provide valuable advice related to cash flow management or other financial matters that can help keep your business on track financially over time!

With these four simple tips in mind, managing your finances as a small business owner doesn’t have to be so daunting! By creating a budget and tracking expenses regularly, securing financing early on if needed, monitoring cash flow closely, and hiring professional help when necessary- you’ll be well on your way towards a successful small business with healthy financials.

6 Year-End Tax Tips That Will Save Your Small Business Money

401K, Business Expenses, Small Business, Taxes

As the end of the year draws near, it’s time to start thinking about your tax strategy. If you’re a small business owner, there are a few things you can do to reduce your tax bill and maximize your deductions. Planning ahead and doing some year-end housekeeping can help you make the most of any tax break that your business qualifies for. We have identified six smart tax moves to consider before the clock strikes midnight on December 31^st.

Write Off Bad Debt

The IRS allows you to write off bad (un-collectible) debts before the end of the year and deduct those that are unpaid from your taxable business income. By writing off this debt, you can reduce your company’s tax burden for the current tax year.

Note, that if the customer ends up paying their invoice in the future, you will need to reverse the write-off and declare the payment as income. It’s best to discuss this with your tax advisor to ensure the process is handled properly.

Stock Up

At the end of the fiscal year, businesses can reduce their taxable income by purchasing business equipment, supplies and other assets that will be used in the coming year. If your business is in a good financial position, replenishing office supplies or stocking up on inventory, could give you a larger deduction.

Prepay Expenses

Businesses can choose to prepay for services they will use in the coming year. For example, insurance coverage, subscription services, business rent, association dues and other fixed expenses can be paid in advance, reducing your businesses taxable income for the year.

Defer Income

Small businesses typically use the cash method of accounting, meaning a company recognizes income when cash actually changes hands. This method allows for the option of taking income this year or next year. If you anticipate being in a lower tax bracket next year, you might want to defer income to take advantage of the lower tax rate. Waiting until close to the end of the year to invoice clients will defer income to the next year and lower your current tax bill.

401(k) Plan for Employees

Setting up or contributing to an employee retirement account can reduce your business’s taxable income. Business owners can claim a tax credit for the cost of setting up and administering a 401(k) plan. The potential tax savings are usually more than enough to cover the cost of setting up and funding the plan.

Employee Bonuses

Many businesses give end of the year bonuses to their employees. These not only serve as extra incentive for employees, but they are also commonly tax-deductible for businesses that operate as corporations. You can deduct the cost of any bonuses paid to employees, if the bonus was given as additional compensation for services, not as a business gift – decreasing your overall tax obligation.

Now is the time to start planning your end of the year tax strategy. Don’t miss out on the opportunity to reduce your business’s taxable income and keep more of your hard-earned profits. Taking advantage of these year-end tax planning strategies will aid in minimizing your taxes and help make next tax season a little less taxing.

The small business tax professionals at Motl Accounting are here to ensure that your business is taking full advantage of deductions, write-offs and other tax benefits to end the year right.

Easy Ways to Grow Your Retirement Savings: Smart Retirement Planning

401K, IRA, Retirement

Retirement often feels like the finish line of a marathon. No matter how far away your last day of work may seem, it’s a goal worthy of pursuit. Creating a retirement savings plan is akin to staying hydrated during a long distance race, otherwise known as your career. It’s a necessary task to ensure you’ll have enough left in the tank (or bank account) when it’s time to settle down.

For retirement, you get what you put in; learn about some of the preparations you can make today to maximize your reward down the road.

(more…)

What You Need to Know About Employee 401(k) Plan Contributions

401K, Accountant, Bookkeeping, Payroll, Payroll Dundee il, Taxes

You might not know everything about employee 401(k) plan contributions, but if you’re an employer, it is your responsibility to understand the basics when you offer this benefit to your workforce. A 401(k) is one of the most common retirement investment options because it is a flexible way to build capital over the course of a career and the funds mostly get withdrawn from your paycheck. We have a Payroll Vault team that oversees the accurate disbursement of these funds from paychecks to 401(k) or retirement accounts. Here’s what makes this type of plan unique and what sets it apart from other retirement options.

(more…)