Before planning your finances for the next year, it’s important to do a compilation and review of your past year to gain an accurate picture of the full-breadth of your financial situation. Annual reviews can be done any time of year, but with 2023 drawing to a close, it’s the perfect time to go over your financial wrap-up so you can step into the new year equipped with a plan for success.
In our previous blog from 2020, Year End Tax Planning, we touched on some financial planning strategies in order to reduce your taxes. We’ll give you a refresher on those points here, as well as delve deeper into some financial planning factors to think about going into 2024.
Recap The Accomplishments Of The Year
When you do your year-end review process, you can assess how well you stuck to your financial plans and goals. Investment companies can recap their biggest stories while individuals can see if they hit savings goals.
With finances, it’s easy to focus on all you have yet to accomplish. Taking a moment in your review to recognize the goals you hit with your business, your retirement accounts, or whatever else can give you more motivation and drive in the upcoming year.
How’s Your Financial Health?
Everyone loves a good success story, but everyone also always has room for improvement – especially when it comes to finances. If this past year wasn’t your best or you or your business are still getting your feet under you, year-end reviews show you where you stand and what you have yet to accomplish so that you can plan for the upcoming year. If this past year hit your goals out of the water, reviews and financial planning help you keep that momentum going.
Year-end reviews are important because your financial situation can change without you realizing. For instance, your asset allocation could be imbalanced due to different assets growing at different rates. Your portfolio may not be as diversified as you think, as can occur when asset values change. New tax rules and regulations can also affect your portfolio.
You may also experience changes in your income, needs, or personal situation, necessitating changes in your financial strategies.
Set Goals For The Future
Financial planning is an ongoing, comprehensive process to manage all areas of your financial life. Whether you foresee a big life change in the upcoming year, like a marriage or a business merger, or you predict smooth sailing, it’s important to set goals so you can strategize appropriately.
Some financial goals can look like:
- Paying down debt.
- Planning for tax deductions and credits.
- Increasing cash flow.
- Increasing profit margins.
- And many, many more.
Your financial advisor will be able to help you identify goals and realistic measures to take to achieve them.
Prepare For Tax Season
Rather than waiting until tax due dates are looming overhead to know the true amount owed, either by you or the IRS to you for your return, it’s best to be proactive. This is especially true if your income varies significantly from year to year. Obtaining a compilation and review of your situation in December helps you figure out what to expect come tax season.
While year-end reviews and financial planning don’t eliminate the stress of taxes, they do alleviate some of it by providing you with an accurate picture of what’s to come so that you’re prepared, rather than biting your nails in anxious anticipation.
The end of a calendar year is a good time for tax planning as this is the deadline for taking advantage of any last-minute tax saving strategies, such as making a charitable donation or maxing out retirement account contributions.
Conduct Your Annual Review With Golub, Senitt, Rosenberg & Co.
By compiling your financial information, reviewing your financial goals, and utilizing tax planning and financial planning strategies, you can set yourself up for success in the upcoming year. Good financial health requires constant maintenance in order to both achieve and maintain. By working with us for an annual review and your accounting needs, you can stay on track and make informed decisions.
Whether you choose to do your annual review at the end of the calendar year or at another point, it’s important to do so in order to gain a long-term view of your financial situation and strategies.
Here at Golub, Senitt, Rosenberg & Co., we take pride in not just providing our clients with accurate, high-quality accounting services, but also with building long-term relationships with them. We hope not just to be a CPA firm you hire to meet your needs, but to be able to advise you in your business.
Whether you need to schedule an annual review or you require accounting services either as an individual or a business, we look forward to the opportunity to serve you. Contact us today to learn more about our accounting services here in sunny Los Angeles.
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