Goodbye, 2021! Another year in the books (and your books better be up to date). Just some finance humor for you.

It’s time to celebrate. The holiday season is upon us. Quality time with family and friends is finally on our calendars. While the end of the year brings so much joy and happiness, this is also the time to ensure you are financially set up for success in 2022. Here are a few tips, along with some holiday movie references, to make it a little more fun!

Comment and let me know if you knew all the movies!

PPP Loans
These should have been forgiven already and remember this is NOT taxable income. Talk to your accountant or tax professional for all the details. Remember when Uncle Billy left 8K in the newspaper and Mr. Potter stole it! Know where your money is and what you need to do with it at ALL Times.

Taxes
Estimated taxes are due January 15th. There is also a lot of talk in Washington about proposed tax changes. Stay up to date and educated on this information. Remember when Scott Calvin put on the Santa suit and became the new Santa because he failed to read the fine print on the business card?

Rates
Next year there may be an increase in tax rates on higher levels of income. If a client owes you money and you are in a higher tax bracket, you will see your rates go up, so you may want to bring that cash in 2021 and not wait until 2022. Similarly, expenses may have a greater effect in 2022 than 2021, so you may want to defer the expense to next year. Remember when the old man ate the turkey even though it still had an hour to cook? Sometimes, you have to wait on things.

Mileage + Meals
We all haven’t been driving as much, but it’s still vital to track it. Take a picture on January 1st and you will be ready to go. Also, meal deductions in 2021 and 2022 increase to 100% to encourage people to get out again. Take your clients to lunch or dinner if you are comfortable and enjoy the deduction. Maybe you will find the world’s best cup of coffee, like Buddy the Elf did.

1099s
I’ve seen an uptick in audits done by the unemployment compensation of PA. If you have independent contractors and paid them more than $600, get a W9 from them and send out a 1099, unless they are a C Corp or an S corp. If you pay by credit card, the credit card company has been doing the reporting in the past, but that will change in 2022. If you don’t do this, they may be considered employees and you will incur fines. Remember when Hermey the Elf taught Rudolph the word independent? A good reminder to think of your independent contractors this season.

Charitable deductions
If you don’t itemize, you can take $300 off if you are filing single and $600 off if you are filing jointly. Luckily, Kevin stopped Harry and Marv and Mr. Duncan was able to donate all that money to the Children’s Hospital.

I wish you a great holiday and a Happy New Year!