Oh, you thought I would tell you who I thought would win the presidential election?
Nope, I’m not going there.
I’m a tax professional though, and I’m not immune to conversations about proper planning for either eventuality. In my opinion, however, the BEST advice about what to do for your Hampton Roads business is “wait and see”.
Here’s what I mean: history suggests that new presidents (if Biden wins, for example) will try to put their new tax policies through Congress during their first year.
That means that if (again, in this example) Biden wins, AND he follows that particular pattern, then his new tax policies — whatever they might be — will likely impact your 2021 or 2022 tax returns.
And, of course, if new tax legislation is passed in 2021, it probably won’t be effective until 2022. Congress very rarely makes tax increases that are retroactive.
*If* you believe that Biden will be increasing taxes on Hampton Roads business owners, one strategy could be to accelerate income into 2020 or 2021 so it can be taxed at the lower rates. You might also be considering taking your “minimum required distribution” from certain retirement accounts (and maybe a bit more) this year, in 2020, even though current law allows you to forego that. In this way, you could accelerate income to be taxed at today’s lower rates.
All of this is assuming things play out in this particular way.
Which is why I advise: wait and see. Then, we will listen together to see what whichever President we have says about their tax plans … and react accordingly.
This is what we do here at Virginia Accounting Services … we pay attention to these very specific tax things so you don’t have to.
In fact … I have a favor to ask of you today: Would you take a moment to leave us a review on Google?
Make us smile with a review on Google
As a business owner yourself, I’m sure you see how these platforms (Google, etc) are now such powerful forces for business growth that having good reviews from kind clients is a significant lever for whether or not good new clients come your (our) way. Sure, it would be fantastic if none of us had to play these kinds of “marketing games” and our success was based purely on how effective we were at helping our clients … but that’s not the way things currently work.
We work extremely hard to not only save you a boatload on your business taxes … but also to have you know that we are in your corner, and that we want to help your business in any way that we can.
So again, find us on Google, if you would, and take a minute to drop us a review. We’d be very grateful.
Make us smile with a review on Google
All of the above said, I wanted to leave you with a short story today. It’s a parable for what keeps certain businesses from making the adjustments they need to make, to fit with the new realities in their particular marketplace…
What Keeps Hampton Roads Businesses From The Pivot?
“I take a simple view of life: keep your eyes open and get on with it.” -Sir Laurence Olivier
A small brewery launched a fancy microbrew. It proved to be very popular–so popular, in fact, that they were having trouble getting it distributed to all the stores and bars in the area. The management team met to discuss the problem.
“Here’s the schedule,” said the manager in charge of distribution. “You can see that we have our biggest shipments on Monday and Tuesday, and then smaller ones Wednesday and Thursday, and all the local deliveries on Friday.”
“We’ll have to change that,” the CEO said, “but we’d better find out why it’s scheduled that way.”
The team couldn’t find any logical explanation for the schedule, which had endured over the years, until they reached a former distribution manager, long-retired, whose grandfather had co-founded the company. He thought for a while, then said:
“Yes, I remember. When we started out, all our deliveries were made by horse-drawn wagons. On Mondays and Tuesdays, when the teams were rested, they could pull a big load, but on Wednesdays they started to get tired, and by Friday they could only make it a few blocks. So we set the schedule that way.”
Let’s all commit to remembering WHY we do what we do … and not let our methods get in the way of our mission. Especially here in 2020, as we move into the final quarter of this crazy year … let’s not be afraid to keep changing where necessary.
I’m grateful for your trust, and for your referrals.
You know how to reach us: 757-857-1880
Virginia Accounting Services
Feel free to forward this article to a business associate or client you know who could benefit from our assistance. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.