Be Prepared for the Fiscal Cliff So Your Business Will Survive the Fall
2012 was like no other year in recent history. We had the Japanese Tsunami, the Middle-East uprising, Super Storm Sandy, the tornadoes and floods, Hurricane Irene and the cataclysmic Mayan apocalypse we all wait for on December 21st. In 2013, we have another storm coming, the economic Fiscal Cliff. If you don't plan accordingly - before the end of the year - the increase in taxes can cripple your business' growth. But you can ensure your business is ready to compete, while getting tax write-offs for 2012, minimizing your liability in 2013.
While contrary to popular belief, the Bush era tax extensions are not the only taxes that will affect the average business owner's liability. Just to name a few, they include:
- The Exemption Phase Out
- Itemized-Deduction Phase Out
- Payroll Tax Increase of 2%
- Long-Term Capital Gains Increase
- Regular Rate Increase
- The AMT (Alternative Minimum Tax) Increase
- The Hospital Insurance increase (not to be confused with the Affordable Care Act)
- The Affordable Care Act tax and fines
And the list is longer. For a complete list and explanation of what each is, read Tax Increases Looming in 2013. You can find the link at the end of the article. Regardless of whether a deal is reached, taxes will still go up; the question is by how much.
Take Advantage of Tax Write-Offs Still Currently Available
While you're not in control of what will happen in Washington DC, you are for what happens in your business. So what are several things you can do to ensure you're prepared for maximum impact? Let's take a look.
Business-Startup Costs Write Off: If you are a new business (author with a first book, a consultant who transitioned during the economy from employee to self-employed freelancer for example) you are allowed to write off your qualified business startup costs up to $5,000 in the year you launched. So if you started conducting business in 2012 (not still in the setup phase) you can write off those costs. Typical costs include hardware (computers and smartphones), marketing material (brochures, business cards and website), signage, legal and professional consulting fees, and any other qualifying startup expense.
If you have not exceeded the limit of $5,000, then you might consider investing in that computer you needed, getting a collateral marketing piece or a mobile ready website. Make sure you are set to compete and attract your customer in 2013.
Marketing Infrastructure for Existing Businesses: Marketing is crucial during downturns in the economy and is a legitimate tax-write off. So if you purchase that public relations campaign, social media package or anything else you may need for your 2013 marketing campaign by December 31st, instead of giving Uncle Sam your hard-earned money, you can strengthen your business for growth and sales. Plus, you will not only get your investment back in January as a tax write-off - but also in ongoing future sales.
With the advent of the Smartphone and tablets, more and more people are shopping on their mobile browser. Read Why You May Be Losing a Boatload of Sales and Not Even Know It. If your website is outdated and not mobile ready (responsive), studies show when a mobile surfer arrives at your site and finds it incompatible with their phone or tablet, they will move on to another and never return. So make sure that doesn't happen to your business, because Microsoft projects that mobile Internet usage will outpace PC desktop usage by 2014. You can't wait until then to get ready.
While death and taxes are unavoidable, you can postpone death with smart health decisions, and you can minimize your tax burden and increase your sales with smart business-investment decisions. And by doing so, hopefully you will gain a whirlwind of sales that not only will pay your taxes for you, but give you a good problem to have - how to minimize your tax burden for 2014!
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