5 Planning Areas to Focus on in 2018

It’s almost 2018!! Can you believe it? I sure can’t. With Thanksgiving approaching in just two days, now is the time to focus on planning for taxes, finances, and business strategy.

What have you done to plan for your taxes for next year? What about financial planning? If you own a business, have you done any strategic planning to get you on track for a successful 2018?

Right now is the time to plan, in this short window before the new year starts. Here are 5 planning areas I recommend you focus on for 2018:

1). Individual taxes

We’ve all heard about the proposed tax plans in the House and Senate right now. Donald Trump vows to pass the most significant changes in tax legislation since the Reagan administration.

Although there is no certainty on what will actually happen, there are many likely scenarios that could factor into how you should plan for individual taxes in 2018. Here are some examples:

  • Reducing the amount of individual tax brackets, which could push you into a higher or lower tax bracket depending on your income level
  • Approximately doubling the standard deduction, repealing the personal exemption, and increasing the child tax credit
  • Limiting or eliminating amounts you can deduct for mortgage interest deductions, property taxes or state and local sales taxes
  • Repealing the alternative minimum tax

It is imperative to figure out which tax bracket you might fall into in 2018, and then see if there are any tax planning strategies that might get you into a lower tax bracket (or higher tax bracket if you have losses or other tax attributes to utilize).

2). Business taxes

In addition to individual tax reform, if legislation is passed, it will greatly impact businesses as well. Here are some examples:

  • Reduction of tax rates for corporate or pass-through entities (with a possible exception for businesses providing personal or professional services)
  • Repeal of the domestic production activities deduction (DPAD)
  • 100% expensing (bonus depreciation) for certain qualified business property
  • Repealing the alternative minimum tax

If you own a business, you should be following the proposed tax law changes so that you are ready to implement any tax planning strategies if any new tax bills are signed into law before 2018.

3). Personal finances

I can’t stress enough how important it is to focus on personal financial planning during this part of the year, which will likely impact your taxes. Here are some questions you may want to consider:

  • Do you have more than 2 IRAs that you need to consolidate into one?
  • Are you planning to make traditional or ROTH IRA contributions this year, and when?
  • Do you have any stock options or RSUs that will vest in the current year?
  • Do you use software to track your personal income and expenses so that you can create a budget for 2018 to stay on track?

This is only a short list of questions that you should be answering in order come up with a plan to improve your personal finances for 2018.

4). Accounting software

Right now is the best time to implement accounting software to track your personal or business finances.

Why? Because if you convert to a new software from your current software, it will allow you to move over the balances so that you can have a fresh start in 2018.

If you are implementing software for the first time, it will give you time to set it up correctly before the new year starts.

I am a huge fan of using Xero’s Standard Business Plan to account for your business finances or Xero Cashbook to plan for your personal finances.

5). Strategic planning

If you are a business owner, now is the time to focus on strategic planning. Here are a few questions you may want to consider:

  • Does how you currently run your business align with your mission, vision, and core values?
  • Are you tracking the right key performance indicators (KPIs) to make sure your business is on track?
  • Do you have processes in place for forecasting, budgeting, and managing cash flow?
  • When evaluating people in your organization, do you have the right people in the right positions?

I devote every single Monday to solely focus on strategy for my business, and it is paying off. I feel like I know where my company is going and have processes in place to keep my company on track for future growth.

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