I wrote something similar to what I’m about to offer you today for our individual/family clients recently, but it occurred to me this morning that YOU, as a successful Metropolitan NYC business owner, might especially benefit from the perspective that I’d like to offer you.
You see, I’m writing today about giving … and why it might actually be in your enlightened self-interest to do so.
But before I get there, a few things to review.
With year end hurtling towards us, it might make sense to consider some last-minute moves to help your tax bill. Last week, I gave you some generalized advice, which included:
1) Entity considerations (specifically around the new 20% QBI deduction for pass-throughs) and 2) Year-end purchases.
And on the personal side, you might:
1) Double-check withholding and estimated taxes.
2) Evaluate where you are with charity giving.
3) Be careful about mortgage moves.
4) Catch up on retirement savings.
5) Consider making large purchases before online sales tax fully kicks in.
6) Don’t forget to give tax-free gifts and use your FSA funds.
This is all “general” advice that you should consider. Every person’s situation will be slightly different, and I don’t blame you if you want some guidance. In which case, give us a call: (718) 896-8715 (or send an email through the email button at the top of the page), and we can see if we have any open slots for some quick, year-end tax planning with you.
Oh, and one more “taxy” thing: The IRS JUST released mileage rates for 2019 (finally) and they can be found here: https://www.irs.gov/newsroom/irs-issues-standard-mileage-rates-for-2019
All that aside, let’s circle back around to giving, shall we?
Why Metropolitan NYC Business Owners Should Excel in Year-End Giving
“In ordinary life, we hardly realize that we receive a great deal more than we give, and that it is only with gratitude that life becomes rich.” -Dietrich Bonhoeffer
There’s something that happens to your soul when you cut a big check to someone in need.
You signal to those very fears and desires which so often control your unconscious thoughts: “Revenue doesn’t rule me. My business has more than enough, so much more than enough that I’m giving it away.” Then, of course, something special often happens: more money seems to find its way in your hands.
Now, please understand: I’m not advocating a mystical pay-it-forward scheme; I’m simply making the observation over years of being a student of how money “works”. And, “coincidentally” it just seems to find itself in the hands of those who give it away.
Why is it that those who are benevolent seem to be well taken care of, even rich? I see the balance sheets of people and business owners from every walk of life and every kind of revenue category, and over the years I’ve noticed an interesting phenomenon: individuals and business owners who make year-end giving a priority, even when they aren’t “wealthy” or “successful” by others’ standards, seem to eventually do better in the long run. And I do mean financially — not just in their state of mind.
I know many families of significant means who were NOT wealthy when they started to give away large percentages of their income (15%+). Coincidence?
So I’d say that this first dynamic is one significant reason to give: Your soul is set free from the shackles of fear and greed.
Here are two more big reasons:
2) You build a network of grateful friends and organizations. You’ll never know when someone to whom you’ve donated or given (be it time, money, connections, or other resources) comes back to you with something you need, at just the right time.
Personally, I’ve seen this dynamic in play enough times to not dismiss it. When you act or give generously, it’s the most powerful form of networking on the planet. Obviously, there are better, less self-interested reasons to give … but there sure are worse ones.
3) Your perspective can shift in an instant. When you don’t just give money, but also time and heart, you often learn heretofore unrealized reasons for being grateful about your own present circumstances.
Sometimes giving to institutions that work with the poor can bring home appreciation of your own enormous wealth. And it can also bring home awareness of a poverty which isn’t solved through adding zeroes to a bank balance. But either way, if you do it right, you are changed for the better.
With these reasons, AND the monetary benefits to your tax return, I urge you: stretch yourself this month. Give more than you think you should. See what happens.
I promise it’ll be good.
All of this said: I firmly advocate for being careful with your planning of said giving. I don’t suggest impulsivity, just some measured risk-taking.
But don’t risk losing out on the tax advantages to gifting appreciated stock, or other, less common, forms of gifting. Shoot me an email through the email button at the top of the page, or give us a call ((718) 896-8715) if you want to discuss the tax implications of your year-end giving.
It is, after all, what we do.
Feel very free to forward this article to a business associate or client you know who could benefit from our assistance — or simply send them our way. While these particular articles usually relate to business strategy, as you know, we specialize in tax preparation and planning for families and business owners.
Allan J Rolnick
Allan J Rolnick, CPA, CTC