How Do I Spend the Extra Money I Receive from the Tax Act?
The recent tax act signed by President Trump reduces withholding tax requirements and results in most individuals to pay less withholding tax. Business tax rates have been reduced dramatically.
We have some ideas to share with you about ramifications for individuals and businesses.
- Remember it’s not a pay increase; the money is and has always been yours.
- The government is simply retaining less withholding than previously.
- Before you buy new electronics, a new car or boat, or sign up for a vacation, carefully review and consider what will be the best investment for you. If your business has debt load, reduce it. Interest rates will only go up.
- Consider additional contributions to your retirement account. Studies show that many individuals today have not adequately planned and prepared for retirement. With this “extra” money, you can easily add to your retirement account and not impact your current lifestyle.
This is money that was formerly used to pay taxes; make it work long term for you. Think about budgeting. Saving is probably one of the wisest courses of action. While not exciting, money saved for later helps you rest comfortably knowing that if an unexpected expense arises, you have the fiscal resources to address the challenge.
Why not visit with your accountant and business consultant to make a plan for the future? Spending time on budgeting and thoughtful decision-making are wise steps when you think about what to do with those “extra” funds. If you need some help, give us a call.