Contrary to popular belief, spending money just for a year-end tax write-off can be a poor financial move. If your income is on a sharp upward trajectory, delaying the expense to the next year could result in a larger tax saving, as you'll likely be in a higher tax bracket.
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A common mistake among new creators is spending early profits on luxury goods instead of reinvesting in the business. The most effective use of that capital is hiring people to scale operations. This accelerates the path to long-term wealth and achieving your dream, rather than just the appearance of success.
Many entrepreneurs miss that a portion of their home cleaning service is tax-deductible as part of the home office deduction. The rationale is that any commercial office lease would include maintenance and cleaning costs, and the home office is no different.
It's tempting to push late-stage deals into January, but this is a dangerous trap. Once the holiday break occurs, momentum is lost and priorities shift, meaning these deals rarely close. Leaders must create urgency to close before year-end, as rollovers are effectively lost opportunities.
Most new entrepreneurs wait for revenue before formalizing their business with an LLC or hiring an accountant. The savvier approach is to establish this legal and financial foundation from day one, even before profitability. This professionalizes the venture immediately, forces a serious mindset, and builds a solid base for future growth.
To preserve your ability to make tax-deductible retirement contributions for the current year, you only need to *open* the account before December 31. You can then wait until you know your final tax liability (up until the April tax deadline) to decide the exact amount to contribute.
After learning how much of their estate would be lost to taxes, Heather Dubrow's surprising takeaway was to spend more money. For those in the highest tax brackets, enjoying their wealth becomes a logical alternative to having a significant portion of it seized by the government upon death.
Don't rush to form an S-Corp. The tax savings typically don't outweigh the added costs and complexity, like running payroll, until your business is generating at least $60,000 to $80,000 in profit. Before that, a sole proprietorship or standard LLC is often more efficient.
When converting a pre-tax 401(k) to a Roth IRA, you owe income tax on the entire amount. To preserve your principal, pay this tax bill from a separate savings account. Using the retirement funds to pay the tax permanently reduces the base for future compounding.
Prospects use the new year as an excuse to delay decisions. During this idle time, priorities change, budgets are reallocated, and competitors gain access. Salespeople should abandon delusional optimism and treat these opportunities as dead, focusing instead on closing deals now.
Tax attorney Brayden Drake admits he formed his S-Corp two years too early. Inconsistent revenue made it difficult to pay himself a required salary, leaving insufficient profit distributions to generate significant tax savings. This premature move added complexity without the financial benefit.