End-of-Year Business Spending in Lincoln – November 2021

The end of the year is coming quickly, and business owners are gearing up for the upcoming tax season. During a time when spending is most often thought about in relation to the holidays, it’s also a common time for business spending, depending on where you are at with your budget, and in turn, how that will impact your taxes. We talked to a number of tax specialists in the Lincoln area to get some advice about what businesses need to be considering for end-of-year spending to close out the year in the best financial condition possible.

Talk to a Trusted Advisor

At SP Group, P.C. (spgrouppc.com), they can help you stay ahead of the game with their proactive year-end tax planning processes, which help you manage and plan for your tax liabilities. They’re able to provide services for various entities including individuals, corporations, partnerships, trusts, estates, and nonprofit organizations.

“As a business owner, the end of the year is a pivotal time that can easily be overlooked,” said Mark Nave, CPA. “It is vital to have a trusted advisor who can help you make the right decisions when it comes to when and where to spend your money before year-end. You will need to look at the big picture and see if it makes sense to maximize your tax savings this year or possibly move some of those expenses to the next year. Every situation is unique, and while working together, we can help you make the best decision for your business. For example, if you had a lower income year and are going to be paying taxes at a lower rate, it may make sense to delay spending some of those end-of-year dollars until next year when you expect income to be higher, offsetting the tax at a higher rate. An advisor who understands you, your business, and your goals will ultimately guide you to make the correct and most effective decision as the year comes to an end.”

As Mark noted, paying ahead for certain expenses can certainly have its benefits. If there are certain supplies, equipment, or other expenditures that you can reasonably foresee your business needing in the coming year, it may make sense to purchase those before the end of the year to maximize your tax benefit and get those savings now.

“Another form of paying ahead of time could include paying bonuses to your valued employees, which creates both a tax deduction for you and is a benefit for your employees,” Mark suggested.

We also asked Mark about any tax policy changes, and how that might affect year-end spending for businesses.

“Among the most important tax planning considerations for the 2021 tax year is related to the change in administration that occurred in January and the current discussions about changes in tax policy that are being discussed by our elected representatives in Washington DC,” explained Mark. “Currently we are hearing speculation on what changes to our tax code could come into effect for 2022 tax years and beyond. These potential changes to our tax code could have a significant impact on tax planning and decision making for the 2021 tax year.”

Ultimately, SP Group wants to keep you and your business staying ahead by being prepared. They use their core values to help you get the most out of your end-of-year spending.

“At SP Group, we pride ourselves on being proactive and ahead of the game, rather than having to react and deal with unpleasant surprises on April 15,” Mark concluded. “We feel our four core values are Relationships, The Power of Team, Life/Work Balance, and Competitiveness. These combined allow us to provide the extra insight necessary to maximize the benefits of year-end planning for you and your business.”

Find the Best Investment for Your Business

Cruise & Associates, Inc. (cruise-associates.com) is a regional accounting firm that has been working with individuals, businesses, and farm clients year-round for 30 years to help them reduce their tax burdens and improve their profitability. Their professionals specialize in a number of industries, including but not limited to: restaurants, bars, lounges, transportation, chiropractors, veterinarians, auto repair, real estate, and service businesses. Cruise & Associates provides consultations with business owners so they know precisely where they are financially, and they’ll help businesses create plans that are unique to their particular business and help them determine what they need to do in terms of spending before the end of the year.

“There is still time to get your business into the best possible tax position for the new year,” said Robert Cruise, president. “There are several year-end tax moves to consider. One could be updating the office. A fresh coat of paint and new office furnishings not only make the office more comfortable, but they also provide another tax deduction. How you handle deducting these expenses will vary depending upon whether you own or lease your office space. Another great option is rewarding your staff with a year-end bonus. It’s a great way to let them know you appreciate them, and it’s tax-deductible. You could also update your skills by attending a workshop or conference. While there are some limitations, many travel, lodging, and out-of-pocket expenses related to the training are tax-deductible.”

Other suggestions Robert shared included planning for the future by setting up a retirement plan for yourself and your employees, as employer contributions are typically tax-deductible, or investing in the company vehicle through general expenses such as fuel, oil changes, new tires, or basic repairs.

“There are a lot of nuances in the tax code affecting each of these end-of-year moves,” said Robert. “Don’t hesitate to get in touch if you need advice.”

A Team That Can Handle Anything!

Lutz (lutz.us) is the largest locally owned firm of its kind in Nebraska. Their tax team will work closely with you to help identify tax strategies that are critical to your continued success. They have the capacity to handle any level of complexity for entities ranging from corporations to partnerships to individuals and a variety of industries.

“As a tax advisor, I believe the most important thing to keep in mind is to avoid spending money for the sole purpose of chasing tax deductions,” shared Jonathan Patent. “Many taxpayers spend large amounts of money at the end of the year to simply avoid paying income tax. This makes sense for some, assuming the dollars are spent on products/services that will be needed in the future. For example, say a taxpayer knows they have a project that is set to begin early next year that will require a significant investment in new equipment. In this case, purchasing that equipment prior to the close of the year is a great idea. On the contrary, if that same taxpayer had no short-term equipment needs, it may make sense to use those dollars instead to pay down any outstanding debt to save on interest costs. Also, if the current year finished off less profitable than normal, deferring the deductions by delaying end of year spending to next year could mean more return on the investment of those dollars.”

Jonathan is one of many on the Lutz Accounting team. Their large size allows for specialization, in-depth expertise, and the ability to take the time to understand your everyday business practices and provide you with a comprehensive business plan to meet your needs.

Past-Due Receivables

AR Solutions (arsolutionsinc.com) is a licensed, bonded, and insured Nebraska Collection Agency that has been serving the area for over 16 years.

“Do what you do best and pay for the rest!” said Aaron Newell, founder. “Simply meaning, spend your time and efforts in whatever your specialty is and employ a specialist to do the things that you aren’t an expert in. Time is more valuable than money because once it is gone, you never get it back!”

They can help you with your end-of-year spending by analyzing the prior year to see if receivables are in line with industry trends. Though they specialize in healthcare collections, AR Solutions also has a division that performs retail and commercial collections. They are widely recognized for their professional handling of accounts as well as a success rate of collecting, on average, 2.5 times the national average.

“As we are nearing the end of a tax year, I think businesses should remember that cleaning up past-due receivables is an important end-of-year task, too,” said Aaron. “I would suggest taking a look at delinquent receivables and offering incentives to pay them prior to year-end.”

AR Solutions offers competitive fees that are contingent upon collection. You can trust that your accounts will be handled with the highest-quality services so you can focus your time and energy on what it is that YOU do best—running your business.

So, Where Do I Spend Extra Income?

You might be considering investing your money back into the office and upgrading workplace safety and configuration. AOI Corporation (aoicorp.com) can construct and furnish the built environment thanks to their decades of experience, the latest research, and state-of-the-art tools and equipment. They offer solutions including construction, furniture, and prefabricated wall systems that can be leveraged in conjunction with one another or used separately to achieve your business goals.

“Before spending your money on furnishings, consider selecting items that are highly flexible and adaptable—easily moved and reconfigured as needed,” suggested Penny Johnston. “If you aren’t sure where to start, we can help guide you through the process.”

Changes in technology, workflow, regulations, staffing, and disasters all highlight the need for environments to flex and adapt. Pre-manufactured interior solutions offered by AOI are keenly focused on solving this issue for businesses. AOI does a fabulous job of helping you create a fully integrated, customized approach to creating far more than an office space for you.

“Our clients trust us because we make their problems disappear,” Penny said. “They value us because we operate as an extension of their business. We offer a non-prescriptive, adaptive, and customized approach that custom-fits an organization, its vision, and goals. By working together, we don’t just solve the problem, we offer the right solution.”

Another way to use your extra income is to gear up for 2022 by becoming a member of the Lincoln Chamber of Commerce (lcoc.com). When your business becomes a Chamber member, you will be able to better connect your company to the city of Lincoln and to other businesses. This is a great way to maintain credibility and collaborate with local leaders who are building businesses and the community.

When you are a Chamber member, you receive access to networking events such as morning meetups and after-hours gatherings. Your voice is included in the larger conversation focusing on important community issues, and you have the opportunity to participate in annual events such as Savor the City and the Lincoln Expo.

The Chamber works with lawmakers and local officials to advance pro-growth policies, and is continually working to make Lincoln the best place to do business. They are passionate about supporting local businesses, so join today to put your business in a position for growth in 2022.

One more suggestion for end-of-year spending is by investing in marketing for your business. Strictly Business fills a niche in the local marketplace, connecting both consumers and businesses with other businesses. People read Strictly Business to find out what’s happening here in the community, tap into the knowledge shared by local experts, familiarize themselves with names and faces of local businesspeople, discover opportunities, and get ahead. As an advertising tool, we allow businesses to increase their brand awareness and gain credibility. Invest in your business’s marketing by scheduling a meeting with our President Paige Zutavern to discuss the best advertising strategy that fits your budget and goals.

Meet with a professional to discuss your options for year-end spending that has your business’s best interests in mind. We recommend these local professionals and businesses to help you make 2022 your business’s best year yet!