Covid-19 has disrupted tax and retirement planning for small-business owners, especially those who focused on saving their businesses from the pandemic’s fallout earlier this year. With some hard work, however, there is still time to get back on track by Dec. 31.
Here’s a great example. After his business tanked this spring, one of my clients didn’t take a paycheck for six weeks. To preserve cash, he also lowered the amount of his federal and state withholding tax and stopped contributions to his company retirement plan. Fortunately, in the past few months, his business has largely rebounded. And to his own surprise, revenue for 2020 will be higher than what he projected at the beginning of the year.