Too often you find yourself in a situation and aren’t sure what to do. Here are some everyday tips that could come in handy!
Chew the aspirin. Taking an aspirin at the outset of a heart attack could save a life. But for an aspirin to save your life during a heart attack, you need to chew it. Aspirin, which inhibits platelets that speed blood clots, works fastest if chewed.
Celsius to Fahrenheit conversion: Degrees in Celsius x 1.8 plus 32. Only 5 countries measure temperature using Fahrenheit, so it is good to know how to convert from one to another. C to F: Take the temperature times 1.8 and add 32. F to C: Reverse the math. Subtract 32, then divide by 1.8.
Cats like milk, but it often does not like them. It’s not healthy for your cat to eat or drink anything that contains dairy. Cats have a degree of lactose intolerance and can get sick from large quantities of milk.
Miles to kilometers? Use the 3-5 method for an approximation.
Kilometers to Miles: Divide by 5, multiply times 3
Miles to Kilometers: Divide by 3, multiply times 5
Never fear calls from the IRS. Don’t be afraid of a phone call from the IRS – because they will never call without mailing you first. If you owe money to Uncle Sam, the IRS will always initiate communication via mail.
Should you have any questions regarding your situation, feel free to call.
Raising prices can be fraught with risk during good economic times. So what happens if you try to raise prices during bad economic times?
As Hamlet would say, “Ah, there’s the rub.” If you raise prices, you risk losing clients to competitors. If you don’t, decreasing revenue or rising costs can capsize your company. So what’s a small business supposed to do?
The Art of Pricing
Raising (and, sometimes, even lowering) prices can be a balancing act. As with any major business decision, pricing should take into account various factors. Here are several to consider.
Analyze costs. First, you need to carefully analyze the costs needed to bring your products or services to market. Such expenses might include raw materials, storage, personnel, advertising, delivery, rent, equipment, taxes and insurance. Failure to cover all these costs in your price will inevitably lead to shrinking profits.
Establish profit margin. Next, it’s important to establish an acceptable profit margin. This is where the art of pricing begins. To find your company’s sweet spot with regards to pricing, consider researching competitors in your region to determine their pricing for comparable products, raising your finger to the wind to discern the business climate and asking your customers about their preferences.
Listen to your customers. Your customers will tell you if you raised prices too high. They’ll either continue to buy your product or seek out a competitor.
Consider incremental price increases. Small, incremental price increases tend to be more palatable to customers than a few large changes. We see this every day in the rising cost of gasoline, utilities and taxes. Many customers can handle incremental inflation…just don’t shock them with a huge increase all at once.
When considering pricing, it’s important to take a long, hard look at both your costs and the quality of your products and services. Customers will generally pay a premium for goods and services that provide greater value. Successful business owners endeavor to increase both the actual quality of their products and the perception of that quality in the minds of customers. Do both well, and a price increase may be in order.
As an owner of a small business, you’ve proven that you’re a self-starter by operating a successful private enterprise. Of equal importance is applying your skills towards saving for your future. Here are some of the most popular tax-advantaged retirement vehicles for small business owners in 2020 and some tips on saving for retirement.
Options if you’re not currently enrolled in a plan
For small business owners not currently enrolled in a retirement plan, here are three of the most popular retirement account options:
Simplified Employee Pension (SEP) IRA Account. Contribute as much as 25% of your business’s net profit up to $57,000 for 2020.
401(k) Plan. Contribute up to $57,000 of your salary and/or your business’s net profit.
Savings Incentive Match Plan for Employees (SIMPLE) IRA Account. You can put all your business’s net profit in the plan, up to $13,500 plus an additional $3,000 if you’re 50 or older.
Which plan should you choose? SEP and SIMPLE IRAs are ideal for either sole proprietors or really small businesses (no more than one or two dozen employees). Due to higher administrative costs, 401(k) plans are usually more suited for larger small businesses (more than one or two dozen employees).
Tips to maximize your retirement contributions
For small business owners who are currently enrolled in a retirement plan, here are some suggestions for maximizing your annual contributions into your retirement accounts:
Pay yourself first. Instead of funding your retirement account with whatever is left over after paying your monthly bills, decide at the beginning of each month how much you want to set aside to fund your retirement. Make funding your retirement each month as important as your other bills. Then assume that you pay your retirement bill first. If you run out of money before paying all your bills, decide if there are any expenses that can be pared back for subsequent months so you can meet your monthly retirement savings goal.
List your retirement contributions on your income statement. It is easy to forget about retirement planning when running the day-to-day operations of your business. To keep retirement contributions top-of-mind, record these as a separate line item on your business’s income statement.
Review your tax situation at least twice a year. Tax planning is now more important than ever with the uncertainty caused by the recent pandemic. So review your tax situation at least twice every 12 months to see how to maximize each year’s retirement contributions.
As always, should you have any questions or concerns regarding your tax situation please feel free to call.
Estimated average Social Security retirement benefits starting January 2021
All retired workers in 2020 $1,523/mo
All retired workers in 2021 $1,543/mo
Did you know? You can increase your Social Security retirement benefits by 5-8% when you delay applying until you’re age 70.
1.6% cost of living adjustment for Social Security retirement benefits and SSI payments begins with the December 2020 benefits (payable in January 2021).
The 2021 maximum Social Security retirement benefits a worker retiring at full retirement age is $3,148/mo.
Did you know…
97% of U.S. citizens over age 60 either receive Social Security or will receive it in the future.
1 in 4 seniors expect Social Security to be their primary source of income.
Social Security pays benefits to more than 70 million people including retirees, children and surviving spouses.
2021 Social Security and Medicare tax rates
If you work for someone else…
your employer pays 7.65%
you pay 7.65%
If you’re self-employed…
you pay 15.3%
Note: The above tax rates are a combination of 6.2% for Social Security and 1.45% for Medicare. There is also 0.9% Medicare wages surtax for those with wages above $200,000 single ($250,000 joint filers) that is not reflected in these figures.
Maximum amount you can pay in Social Security taxes
2020: $8,537.40
2021: $8,853.60
165+ million people work and pay Social Security taxes.
Social Security has provided financial protection for Americans since 1935.
Maximum earnings amount Social Security will tax at 6.2%
2020: $137,700
2021: $142,800
How does Social Security work?
When you work, you pay taxes into Social Security.
The Social Security Administration used your tax money to pay benefits to people right now.
Any unused money goes to the Social Security trust funds.
Later on when you retire, you receive benefits.
Social Security payments explained
SS Social Security retirement benefits are for people who have “paid into” the Social Security system through taxable income.
SSD or SSDI Social Security Disability (SSD or SSDI) benefits are for people who have disabilities but have “paid into” the Social Security system through taxable income.
SSI Supplemental Security Income (SSI) benefits are for adults and children who have disabilities, plus limited income and resources.
Maximum SSI payments
2020
2021
Individual
$783/mo
$794/mo
Couple
$1,175/mo
$1,191/mo
Here’s how to qualify for your retirement benefits
When you work and pay Social Security taxes, you earn “credits” toward Social Security benefits. The number of credits you need to get retirement benefits depends on when you were born.
If you were born in 1929 or later, you need 40 credits (10 years of work) to receive Social Security retirement benefits.
The earnings needed for a credit in 2021 is $1,470.
4 credits maximum per year.
Did you know you can check your benefits status before you retire?
You can check online by creating a my Social Security account on the SSA website. If you don’t have an account, you’ll be mailed a paper Social Security statement 3 months before your 61st birthday.
It shows your year-by-year earnings, and estimates of retirement, survivors and disability benefits you and your family may be able to receive now and in the future.
If it doesn’t show earnings from a state or local government employer, contact them. The work may not have been covered either by a Section 218 agreement or by federal law.
