Whether you are filing your individual 1040s or are responsible for the taxes of a small business, you can avoid surprises at tax time by getting a clearer picture of your finances. One of the best ways you can do that is by creating a budget.  

Budget Basics

There are a lot of definitions of budget floating around out there. We like one from Nerd Wallet, which says, “A budget is a way to balance income, expenses and financial goals for a specific length of time.”

We like that definition because it brings your goals into the equation. If you think of a budget as just numbers, the idea of making everything balance can seem remote (or even worse, like a story problem from your high school math class!). When you tie those numbers to your goals – whether you want to take a dream vacation or buy a house – they start to have real meaning in your life. 

As the folks at Nerd Wallet explain, there are many different budgeting plans. Whichever method you adopt, it is important to remember that, “Any budget must cover all of your needs, some of your wants and — this is key — savings for emergencies and the future,” they say. 

At Nerd Wallet, they like to use the 50/30/20 rule as a basic framework for creating a budget:

• 50% of your income should be designated for your needs.
• 30% of your income can go toward the things you want.
• 20% of your income should be targeted toward savings and debt repayment.

If you have a small business in Tampa, QuickBooks might be a good tool for you to consider. But whether you are looking to set up a business or personal budget, the Tampa accounting firm of Walter S. Sanders & Associates is here to help.

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