Budgeting Errors to Avoid
When it comes to creating a budget, it’s essential to estimate your spending as realistically as possible. Here are three budget-related errors commonly made by small businesses, and some tips for avoiding them.
- Not Setting Goals. It’s almost impossible to set spending priorities without clear goals for the coming year. It’s important to identify, in detail, your business and financial goals and what you want or need to achieve in your business.
- Underestimating Costs. Every business has ancillary or incidental costs that don’t always make it into the budget–for whatever reason. A good example of this is buying a new piece of equipment or software. While you probably accounted for the cost of the equipment in your budget, you might not have remembered to budget time and money needed to train staff or for equipment maintenance.
- Failing to Adjust Your Budget. Don’t be afraid to update your forecasted expenditures whenever new circumstances affect your business. Several times a year you should set aside time to compare budget estimates against the amount you actually spent, and then adjust your budget accordingly.
Key Tax Cut-off Amounts
Three changes in 2012 Tax Filing details to make note of …
- The value of each personal and dependent exemption will increase $100 to $3,800 in 2012.
- The new standard deduction is $11,900 in 2012 for married couples filing jointly. Individuals and married people filing separately will see the standard deduction rise to $5,950 and the standard deduction for head of household rises to $8,700. Nearly two out of three taxpayers take the standard deduction, rather than itemizing deductions.
- Annual gift tax exclusion remains at $13,000 in 2012. The basic exclusion from estate tax amount increases to $5,120,000, from $5,000,000 in 2011.
Tips and Notes provided by Sean Dever CPA. Sean provides personal service and expertise at affordable rates for business owners, executives and independent professionals.