Last week here on Ye Olde Long Island and Stamford Accountant Blog, I wrote an exploration of the question: “What would you do with 24 hours left to live?”
Well, this week we’ll leave aside that whole “dying” thing, and, instead, examine using EVERY 24 hours in the best way possible. Because this holiday month is pretty much jam-packed, right?
But before I go there, a few expiring tax-savings ideas for you (specifically for your Long Island and Stamford business) as we hurtle towards year-end. Because these three maneuvers are going away after this year, unless they are somehow renewed…
1) Consider a Section 179 deduction. Under the Section 179 deduction, Long Island and Stamford (and beyond) businesses can write off their equipment purchases dollar-for-dollar, with certain limits. For example, a Long Island and Stamford business could buy a new truck, new machinery, or new servers, and deduct the first $500,000 in costs for the 2013 tax year. Without an extension by Congress, the allowed first-year deduction drops to $25,000 in 2014. I’d say that’s a pretty significant incentive to purchase and place into service any fixed assets or equipment! And a reminder: it must be “placed into service” by year-end to qualify. [So, you’d need to move quickly on this one.]
2) Capture the first-year bonus depreciation. Larger Long Island and Stamford companies that spend more than $2 million on capital equipment should look into the “first-year bonus depreciation” allowed in 2013 but set to expire. Under this rule, brand new equipment can qualify for a write-off of 50 percent, with no limits, so $5 million of a $10 million purchase could be expensed.
3) Explore the R&D tax credit. Another tax-related item set to expire in 2013 is the tax credit for research and development. And despite the “high tech”-sounding name, this credit is not for Long Island and Stamford-area tech companies alone. If you’re having to come up with new ways of doing things, new processes, you very well might qualify — but this is one that depends on the specifics of your situation, and probably should be a part of a longer conversation.
Help us help you make the right year-end decisions and call: (516) 449-2852 or (203) 658-5092 to set up a year-end tax planning appointment for Long Island and Stamford-area business owners.
Now, moving on — as business owners, it’s imperative that we continually improve the usage of our time. Because no matter how many zeroes are in our bank balance, this commodity is the only one out there (that I know of, at least) with an absolutely-limited supply.
Shocking Confession From Long Island and Stamford Accountant: Your Time is Worth *More* Than Money
“The successful person has the habit of doing the things failures don’t like to do.” -Albert E.N. Gray
In 1910, Arnold Bennett wrote one of the first self-help time management books, How to Live on 24 Hours a Day. From Bennett’s book, we can learn that even though they say, “time is money,” it isn’t true. Time is worth so much more than money. If you have time, you can acquire more money. But money can’t buy you more time. Time is a great equalizer. You can’t go into time debt. Every day the rich and the poor alike are given twenty-four hours to spend.
The first step is listing all the goals you would like to accomplish. Just putting your goals down on paper doubles the chance of achieving them. You will find that the way you are currently spending most of your time does not work toward your goals.
Don’t put off the things that truly matter to you until you have more time. You will never have any more time than what you are given each day. Instead, you have to learn how to spend your time on the things that matter most.
When budgeting your time you need to take your whole life into account. Start by listing all the regular activities that are important to your wellbeing. Include your family, chores, recreation and exercise, as well as work-related tasks. Then add in the tasks that will help you achieve your goals. Then, allocate a portion of your time to each important activity.
It is best to make habits of the most important uses of our time. Habits work best when they fit into a routine in the normal cycle of time. Routines can be daily, weekly, monthly, quarterly or yearly. If every task has its own time, you won’t feel as conflicted with multiple tasks.
For example, set aside Saturdays for household chores and Sunday as a day of rest. Schedule your most important work for Monday mornings. If it can’t be finished on Monday, the remainder of the work is still available. Each responsibility has a day and time when it receives top priority.
Assuming the weekly work is done, set aside time on Fridays for reviewing your goals and how to use your time more effectively. Many tasks can be streamlined, automated, or eliminated entirely.
It is a small portion of what we do that accounts for the majority of what we accomplish. Time management involves taking each task and making the decision to do it, delegate it, or dump it. Wisdom in business lies in finding those activities where our time is the most effective, and then structuring our work around those activities. As our business matures, everything else should ultimately be delegated or dumped.
Daily routines provide a chance to balance work with personal life. When you are in business for yourself, you can take the afternoon off to coach your daughter’s soccer team, but you can also work until two in the morning. Projects can easily swamp whatever time you allow them to take.
Successful small business owners learn to finish projects quickly. Make it your habit to do the best you can in the moment you are in, with what you have available. Learn the principle of “good enough”, and you will learn how to finish projects in a timely way.
In addition to daily and weekly routines, schedule occasions for tasks that span longer times. Determine the frequency of a task, and then put it on your schedule. Annual events should be given a specific time of the year when they are to be accomplished.
Use these basic principles, and your life will be far more rich … no matter what’s in your accounts.
And don’t forget — we’re right here for you, if you need us: (516) 449-2852 or (203) 658-5092
I would ask that you forward this article to a Long Island and Stamford business associate or client you know who could benefit from our assistance–or simply send them our way. These particular articles relate to business strategy because, as you know, I’m a Profitability Consultant who also specializes in tax preparation and planning for Long Island and Stamford families and business owners. And we always make room for referrals from trusted sources like you.
Warmly (and until next week),