by Jean Miller | Accounting News, Financial goals, News, Newsletter
What you choose to do with your tax refund can significantly impact your long-term financial health. Instead of splurging, consider using this extra cash to strengthen your finances. Smart strategies, such as building an emergency fund, paying off high-interest debt, investing, and addressing maintenance costs, can set you up for greater financial stability in the future.
Boost Your Emergency Fund
An emergency fund should house at least three to six months’ worth of living expenses in a liquid savings account. If you have yet to create an emergency fund, consider using your tax refund to establish a solid foundation. If you already have an emergency fund but you’re short of the recommended goal, your refund can provide the funds to top it off.
In the case of unexpected expenses, such as medical bills, car repairs, or job loss, an emergency fund provides a financial cushion to help avoid sinking into debt. Having this safety net can prevent you from relying on credit cards or loans, keeping you financially secure even when life throws curveballs.
Pay Down High-Interest Debt
High-interest debt, such as credit card balances, can quickly spiral out of control if left unchecked. If you have credit card debt or personal loans with high interest rates, using your tax refund to pay down your debt will lower the amount of interest you’ll pay in the long run, which saves money over time and improves your financial situation.
There are two common methods for paying off debt: the avalanche method and the snowball method. With the avalanche method, you prioritize the highest-interest debts first, potentially saving a significant amount of money in interest in the long run. The snowball method, where you pay off the smallest balance first, helps to build momentum and hit quick wins. Whichever method you choose, using your tax refund to eliminate or reduce debt is one of the smartest financial moves to make.
Invest the Extra Cash
Investing your tax refund can help grow your wealth over time. You could contribute to a retirement account such as an IRA or 401(k), which not only helps secure your future but can also provide tax advantages depending on the type of account.
If you’re looking to build wealth more actively, consider opening a brokerage account to invest in stocks, bonds, or mutual funds. If you’re unsure where to begin, low-cost index funds or ETFs can offer a balanced, diversified option for investing. Be sure to analyze your risk tolerance and investment goals before making any decisions.
Spend Your Refund to Get Tax Benefits
Another smart way to use your tax refund is by spending it in ways that could generate future tax benefits. For example, contributing to a tax-deferred retirement account like an IRA or 401(k) not only boosts your long-term savings but can also reduce your taxable income for the current year, potentially lowering your tax burden. The key is to focus on moves that align with your long-term financial and tax planning strategies, ensuring that the money works for you now and in the future.
Address Maintenance Costs (Home or Car Repairs)
Cars and homes often generate unexpected maintenance costs, which can put a dent in your finances if not planned for. Whether it’s fixing a leaking roof or replacing worn-out tires, using your tax refund to cover these expenses can prevent financial stress down the road.
Addressing these maintenance costs will help you avoid larger, more expensive problems in the future, and you’ll have peace of mind knowing that your home and car are in good working order.
Your tax refund is more than just a chance to splurge. It’s an opportunity to strengthen your financial foundation and set yourself up for future success.
by Jean Miller | Accounting News, News, Newsletter
The Trump administration’s tariffs on key trading partners, including Canada, Mexico, and China, could have far-reaching consequences for U.S. consumers. With a 25% tariff on Canadian and Mexican goods, a 10% tariff on Chinese imports, and a lower 10% tariff on Canadian energy resources, American businesses and consumers may feel the financial strain. Read on as we discuss how tariffs can effectively protect domestic industries, but not without economic ramifications, notably higher prices for everyday goods and services.
What Are Tariffs and Who Pays for Them?
Tariffs are taxes on imported goods. In theory, they encourage domestic production. However, tariffs make foreign products more expensive because the foreign companies importing these goods do not directly pay these taxes. Instead, U.S. businesses that import these products are responsible for tariff costs, which are often passed on to consumers through higher prices.
How Tariffs Lead to Higher Prices for Consumers
The ripple effect of tariffs impacts prices in multiple ways:
- Direct Cost Increases: When businesses have to pay more for imported materials or products, they typically increase prices to maintain profitability. Consumers will likely pay more for cars, electronics, appliances, and other imported goods affected by these tariffs.
- Higher Manufacturing Costs: Many U.S. companies rely on imported raw materials like steel and aluminum. Increased costs for materials lead to higher prices for American-made products, reducing affordability for consumers.
- Retaliatory Tariffs: In response to U.S. tariffs, other countries may impose their own tariffs on American exports, making U.S. goods more expensive abroad. At the time of writing, China has imposed retaliatory tariffs on the U.S., while Mexico and Canada reached agreements with the U.S. to delay tariffs temporarily.
- Increased Costs for Energy and Transportation: The 10% tariff on Canadian energy resources could raise fuel costs, affecting transportation, shipping, and delivery services. This can indirectly increase prices on a wide range of goods, including groceries, clothing, and consumer goods.
Potential Benefits of Tariffs
While tariffs generally lead to higher consumer prices, there are some potential benefits:
- Boosting Domestic Industries: Tariffs make foreign goods more expensive, incentivizing consumers and businesses to buy American-made products. This can strengthen domestic manufacturing and job creation.
- Trade Negotiation Leverage: Tariffs can be used to push trading partners to agree to more favorable trade deals for the U.S., potentially reducing unfair trade practices.
- Reducing Trade Deficits: Higher tariffs may decrease imports, leading to a lower trade deficit as more money stays within the U.S. economy.
Tariffs, in theory, protect American jobs and industries, but the immediate effect on consumers is higher prices on goods and services. Consumers should prepare for rising costs and budget adjustments. Whether the long-term benefits of tariffs outweigh the short-term financial pains remains a debate among economists and policymakers.
by Jean Miller | Accounting News, Business Growth, News, Newsletter, Small Business
Running a small business in 2025 presents both challenges and opportunities. To stay ahead of the competition, you must adopt a proactive approach to planning and execution. By focusing on the following strategies, you can set your business up for success this year and beyond.
Reevaluate Your Business Plan
Your business plan is the foundation of your company’s success and should constantly evolve as a roadmap for goals and strategies to help grow your business. Take time to revisit and update it, reflecting on changes in the market, industry trends, foreseeable challenges, and your company’s current position. Define clear objectives and align them with your long-term vision. A well-structured business plan effectively guides your daily operations and long-term decisions. The start of a new year is an ideal time to reexamine your company’s progress and milestone markers—and shake things up if you’re not meeting goals.
Stay Informed of Market Trends
Staying informed about market trends and customer needs is essential. Conduct regular market research to understand your audience’s evolving needs and monitor competitor activity. What have your competitors done to up their game? Have they introduced new products or improved customer service? What is the plan for your company in response? Additionally, take a proactive approach and look for opportunities for growth and adaptation. Use tools like Google Trends and industry reports to gather insights, enabling you to identify market gaps and stay relevant in a fast-changing environment.
Control Cash Flow Efficiently
Cash flow is the lifeblood of any small business. Create a detailed budget and regularly monitor expenses. Utilize accounting software to track income and outflows in real time and follow up on delinquent invoices. Establish a cash reserve for emergencies, optimize inventory management, and consider renegotiating payment terms with suppliers to maintain a steady flow of funds.
Leverage Technology
Technology can simplify operations and improve efficiency. Explore tools like customer relationship management (CRM) software to enhance client interactions, project management platforms like Asana and Trello to boost team productivity, and Paychex Flex to help streamline payroll and benefits. Automation tools can also save time on routine tasks, freeing you to focus on growth opportunities.
Empower Your Staff
Your team can be your greatest asset. Offer opportunities for skill development through training programs and workshops. Encourage open communication and provide regular feedback. Investing in your employees helps to build loyalty, boost productivity, and cultivate a collaborative work environment.
Focus on Marketing and Networking
Marketing is crucial for driving growth and attracting new customers. Aim to develop a multi-channel strategy that includes content marketing, email campaigns, and paid ads. Focus on your website’s search engine optimization (SEO) to improve visibility and build a social media presence to engage with your audience.
Additionally, as valuable as an online presence is, networking is still highly beneficial to growing your business. Attend industry events and conferences, join local business groups, and actively participate in online communities to build relationships that can lead to valuable opportunities.
Set Specific and Realistic Goals
Success requires clear and actionable objectives. Set SMART goals—specific, measurable, achievable, relevant, and time-bound. For example, aim to increase sales by 15% over the next quarter or onboard five new clients within three months. Create a plan and break larger goals into smaller tasks to stay focused and motivated. Remember to track your progress, adjust your goals as needed, and celebrate milestones and achievements as you go.
by Jean Miller | Business Growth, News, Newsletter, Small Business
For small businesses, growth is both a challenge and an opportunity. To navigate this journey successfully, entrepreneurs should rely on practical strategies that ensure sustainable growth. Here are some proven approaches to help your small business thrive.
Control Cash Flow Effectively
A healthy cash flow ensures that you can cover expenses, invest in growth opportunities, and withstand unforeseen challenges. Start by regularly monitoring your income and expenses. Utilize accounting software to track financial metrics and forecast future cash needs.
Additionally, consider negotiating better payment terms with vendors or offering early payment discounts to clients. By maintaining a steady cash flow, your business can avoid unnecessary financial stress and seize growth opportunities as they arise.
Address Rising Costs Proactively
Inflation and rising operational costs can eat into your profits if not managed carefully. Perform regular audits of your expenses to identify areas where you can cut costs without sacrificing quality. Renegotiate contracts with suppliers or explore alternative vendors to secure better deals. If rising costs are affecting your profitability margins, think about adjusting your pricing strategy.
If rising costs are impacting your business’s profitability, rethinking your pricing strategy might be a good move. To adjust prices effectively, monitor market trends, analyze competitor pricing, and clearly communicate the value of your products or services to customers.
Investing in energy-efficient equipment or adopting cost-effective technologies can also help reduce long-term expenses. By keeping costs under control, you can allocate more resources toward growth initiatives.
Hire and Retain Top Talent
As your business grows, hiring and retaining skilled employees becomes crucial. A strong team is essential for managing increased workloads and driving innovation. Start by creating a clear hiring plan that outlines the roles you need to fill and the skills required.
Focus on offering competitive salaries, opportunities for career development, and benefits like healthcare, paid time off, and 401(k) plans to attract top talent. Retention is equally important—foster a positive work culture, recognize employee achievements, and provide ongoing training to keep your team engaged and motivated.
Prioritize Areas That Need the Most Support
Every business has areas that require extra attention during periods of growth. Identify the departments or processes that are struggling to keep up and allocate resources accordingly. Whether it’s marketing, customer service, or production, addressing bottlenecks will improve overall efficiency and customer satisfaction. Regularly assess your business operations to identify pain points and prioritize them in your growth strategy.
Invest in Digital Tools and Automation
Small businesses must leverage technology for long-term growth. Digital tools and automation can streamline operations, reduce errors, and save time. Consider investing in customer relationship management (CRM) software to improve customer interactions or project management tools to enhance team collaboration.
Automation can also be applied to repetitive tasks such as invoicing, inventory management, and email marketing. By implementing the right tools, your business can operate more efficiently, providing a path for your business to scale while you focus on other key initiatives.
Diversify Your Sales Strategy
Relying on a single revenue stream can limit your growth potential. Diversifying your sales strategy helps your business stay on track in the face of market changes. Explore new markets, introduce complementary products or services, or expand your online presence to reach a broader audience.
Embrace e-commerce platforms and social media marketing to connect with customers in innovative ways. Diversification not only boosts revenue but also enhances your business’s adaptability to changing customer demands.
by Jean Miller | Accounting News, News, Newsletter, Small Business
As the United States prepares for a second Trump presidency, small business owners are paying close attention to the policies that could shape their future. Trump’s economic priorities, including tax reform and deregulation, will echo those from his first term. Here’s an analysis of how Trump’s proposed policies could impact small businesses.
The Tax Cuts and Jobs Act: A Retrospective
One of Trump’s most influential achievements during his first term was the passage of the Tax Cuts and Jobs Act (TCJA) in 2017. The law lowered the corporate tax rate from 35% to 21%, benefiting small businesses organized as C-corporations. Additionally, it introduced the Qualified Business Income (QBI) deduction, allowing certain pass-through entities—like sole proprietorships, S-corporations, and partnerships—to deduct up to 20% of their qualified income.
This meant lower overall tax liabilities for small businesses, leaving more funds for reinvestment, hiring, and growth. However, critics argue that larger businesses reaped the benefits disproportionately while small businesses felt minimal relief.
Key Focus Areas Under a Second Trump Administration
Several proposed policies stand out for their potential to reshape the small business landscape during Trump’s second administration.
Lower Corporate Taxes
Trump has suggested reducing the corporate tax rate further to 15%. For small businesses structured as corporations, this could mean even more tax savings, allowing for more funds to invest in technology, marketing, hiring, and training. Additionally, Trump has floated the idea of eliminating taxes on employee tips for hospitality and service workers.
Pros:
- Increased cash flow for reinvestment.
- Greater incentives to expand operations or hire employees.
Cons:
- Critics worry about the impact on the national deficit.
- Sole proprietors and other non-corporate structures may not see proportional benefits.
Deregulation
Deregulation was a hallmark of Trump’s initial term. In an effort to spur economic growth and encourage investment, his administration rolled back over 1,500 rules across industries. One of the most notable was the energy sector, where deregulation allowed oil and gas exploration to increase domestic energy production and reduce dependence on foreign oil. The result was cheaper gas prices, which directly benefited small businesses in delivery and transportation industries. If Trump continues to minimize compliance burdens, small businesses in sectors like energy, agriculture, and manufacturing will again benefit.
Pros:
- Lower compliance costs, especially for startups.
- Simplified operations in heavily regulated industries.
Cons:
- Some regulations, particularly those related to labor and environmental protections, are considered necessary for long-term sustainability and public welfare.
Tariffs and Trade Policy
Trump’s trade policies in his first term, including tariffs on goods from China and other countries, had a mixed effect on small businesses. The goal of imposing tariffs is to protect domestic manufacturers, but many small businesses that rely on imported materials faced higher costs. Biden kept Trump’s tariffs on Chinese imports, and if Trump continues them into his second term, there could be a continuation of supply chain challenges and increased prices for certain goods.
Pros:
- American manufacturers may gain a competitive edge.
- Encourages investment in American supply chains.
Cons:
- Higher costs for imported materials could squeeze profit margins for U.S. manufacturers.
- Potential retaliatory tariffs by other countries could limit export opportunities for small businesses.
Access to Capital
Lending through the Small Business Administration (SBA) saw a notable increase during Trump’s first two years in office. By streamlining loan processes and promoting programs like the 7(a) Loan Program, his administration helped many small businesses secure funding. Looking forward, Trump could push for expanded SBA lending programs, which would make it easier for entrepreneurs to access the capital needed to grow.
Pros:
- Easier access to financing for new and existing businesses.
- Potential for strong economic growth at the community level.
Cons:
- Over-reliance on debt financing could lead to financial vulnerability during periods of economic uncertainty.
