‘Tis the season to be merry and jolly….and also to be under serious financial pressure in general, especially as a working woman and working mom in particular. In between holiday shopping and other financial obligations of all kinds, it can be easy to overlook our finances and some basic yet crucial accounting tips that can save you and I a lot of headaches before, during and after the holidays.
As a working woman who happens to also serve as a Certified Public Accountant (CPA), I’ve not only experienced this, but also have had the opportunity to learn and teach about and from it. While there’s a lot of talk about saving money over the holidays, what is less talked about are the real financial and accounting concerns everyone faces over this busy time of year and the tips anyone can use to circumvent them:
- PROTECT YOURSELF AGAIN IDENTITY THEFT AND FRAUD
As a busy working mom, shopping online has become my go-to. While most of us are thinking about tackling our shopping lists, criminals are thinking about, well…stealing your identity, money and any tax and financial data available. This information is especially useful as it can be used to file fraudulent tax returns as the new year opens. This is one of the main reasons why the National Tax Security Awareness Week produced by the IRS, tax industry, and state tax agencies, takes place every year in early December to provide basic guidelines for consumers to avoid identity theft, such as:
- Shopping at sites with web addresses starting with “https”
- Avoiding unsecured wi-fi in public places
- Securing home wi-fi with strong passwords
- Using two-factor authentication and strong passwords whenever possible
- Making sure to regularly back up files and computers.
- DON’T LOSE OUT ON CHARITABLE GIVING!
Many of you may consider cleaning up your kids’ closets (as well as your own), pulling out your bank accounts, and helping others by making donations this season. Keep in mind that charitable giving during the holidays especially can contribute to reducing your overall tax bill, however this only applies if you choose to itemize your taxes. It’s important to pick the right charity for you, in terms of whether or not it aligns with your vision and has a decent track record. A good source to consult for this is Guidestar, which provides a list of every IRS-registered non-profit organization.
When planning your charity giving during the holidays, you must consider first what you are giving, as different rules apply to cash, household items and/or long-term gain property. While you can deduct up to 60% of your adjusted gross income when you donate cash to public charities (30% for long-term appreciated assets held for more than a year), you would get a write-off for donations of household items in good condition. If you donate long-term gain property such as bonds and publicly traded stocks, you’re allowed to deduct their fair market value. This is even more relevant for small business owners who can significantly reduce their taxable income this way.
- DON’T LET YOUR SMALL BUSINESS ACCOUNTING GO BY THE WAYSIDE!
For all the working women and moms who also happen to run a business, this season can be especially challenging. Not to mention that the holidays are also one of the most critical and busiest times for many small businesses. This is when keeping track of your business inventory as a small business owner, your expenses and sales, as well as creating a solid marketing strategy.
An efficient way to do this is through the use of productivity apps, as well as by leveraging social media. Most importantly, it’s crucial to keep a close eye on cash flow and prepare for the upcoming tax season.
All in all, the holidays are already a busy time of year and a financially heavy one as well. Keeping these accounting tips in mind can help the transition from one year to the other, as well as one’s personal and financial balance, in check.
The Corporate Sister.
