A Guide to Estate Planning, Wills and Trusts for Families

One of the most important things you can do is start preparing an estate plan and instill a will or trust for your family. A common misconception is that you have to have a lot of money or own a bunch of assets to do this, but you don’t. Getting ahead on estate planning can alleviate the burden and stress from your family, as well as ensuring everything transfers to the people you intend and knowing you have complete control over your assets. 

What is Estate Planning?

Estate planning is taking all of your assets, including your home, car, bank accounts, furniture and anything else you own, and providing instructions for who you’d like to receive each item. Sounds easy enough, right? 


Many people think they aren’t old enough to create an estate plan – that you have to be retired, or on the brink of death to even consider what you’re going to do with your assets, and this can lead to complications. You might not have an estate plan, but your state will decide what happens to your assets and how to care for you or distribute your estate if you become too disabled to make decisions for yourself, or if you pass before planning. 


This is reasoning enough for you to consider planning for your assets to be taken care of. After all, most people want the control of dealing with their own property, not leave it up to the government. 

Where to Begin: A Living Trust or Will?

A living trust is one that takes effect while you are still alive. It can be revocable, meaning it can be altered at any time, or irrevocable, meaning that it’s permanent.


Trusts are commonly used in estate planning to avoid probate, a legal process that involves proving a will. It’s not a cheap process, so a trust is a great workaround to the system. Another way that a trust saves money is that it helps minimize the taxes that are associated with estates. The upfront fees are a bit more expensive, but it ends up saving you and your family money in the long run.


A will helps to express your wishes on a document, and only becomes active after passing. It is used for the distribution of possessions, as well as naming guardianship of minor children, something a trust cannot designate. There is no way to skip probate with a will, which is why trusts have become increasingly more popular over the years, especially for those who want to maximize the wealth for their heirs.

Peace of Mind

If you are considering a trust or a will, or even both, your best option is to talk to a professional about which is right for you. Working through this process sooner rather than later can prevent even more money from being spent down the road, and can eliminate the consequences involved with not creating one at all. Thinking and talking about death isn’t easy, and many people like to avoid it. To ensure your peace of mind by knowing everything is taken care of, reach out to Bumgardner Morrison where we can provide you with the knowledge and guidance you need to make a decision on what estate planning route you should take. 

7 Financial Tips to Remember for Small Business Owners

Running a business is an incredible venture that only a select few people choose to take on. When owning a small business, it can be easy to get distracted by your sales, promoting your business and creating a name for yourself that finances tend to get stuck on the back burner. Before you know it, it’s too late and the amazing business you built from the ground up is tanking because you didn’t follow a financial plan. Our goal at Bumgardner Morrison is to help keep small businesses alive and thriving, which is why we have put together a list of tips to help your business stay successful.

Keep Tabs on your Budget

Creating a budget plan is one of the first and most important things you can do to help your business. Anyone can create a plan, but sticking to it is the hard part, especially when you’re in charge of everything and you can choose to cut corners if you want or feel like you need to. Don’t cut corners, though. Keep up with your budget, follow it, and make amendments to your budget as you start to generate more income and invest in your business.

Automate Bills

As most people do with their personal bills, automating the bills for your business can greatly increase your productivity, as it can get pretty time consuming. In addition to saving time, you are also eliminating the fact that you might not remember every single bill that needs to be paid. Forgetting just one bill can lead to late fees and penalties against your credit. Make sure to keep track of all your payments and even schedule reminders on which days of the month each bill comes out so you can account for it.

Protect Yourself Against Fraud

Yes, even your business can become a victim of fraud so it’s important to be proactive about keeping your data safe. To make sure you, your business, and your client’s information is protected, make sure that your antivirus software is always up to date and train your employees to never open unidentified emails. Check your credit reports regularly for unauthorized use or transactions. In today’s online driven world, hackers are becoming better and better at swiping your information and going seemingly unnoticed. 

Don’t Be Afraid of Loans

Many people are afraid of taking out loans, but it’s because most people weren’t taught how to utilize them the way they are meant to be used. Loans can help you secure more equipment as you grow your business, therefore generating more cash and, in turn, the ability to pay off your loan. Determine the amount for a loan that will help you succeed without burdening you – take just what you need and nothing more. 

Spread Out Tax Payments

Taxes are an inevitable part of owning a business, but you actually don’t have to pay all your taxes upfront each year. You can split your tax payments up quarterly or even monthly, so you are paying less more frequently, instead of a large amount all at once. Treat it as one of your monthly expenses to make it just as easy as the rest of your bills!

Create a Cash Reserve

Again, just like you personally need an emergency fund, your business needs one as well. This is called a cash reserve, and you are essentially putting money away to help for a “rainy day” if you will. Take into consideration that businesses ebb and flow, it might get slow during some seasons, or a piece of vital equipment might need repairing, and an emergency fund can help ease the burden of these inconveniences. 

Seek Help From an Accounting Professional

The great thing about finances is that, if they overwhelm you, you don’t have to manage them alone. It might be the best decision for your business to invest in an Accountant to help you navigate the financials. After all, they are the experts!

At Bumgarner Morrison, we are here to help you with your finances as a small business owner. We’ve been in the accounting business for more than 70 years helping people like you succeed. We offer bookkeeping, reporting, planning, and auditing services as well as advice to help you manage your wealth. Contact our professionals today!

2021 Tax Season: What Has Changed for Small Businesses

Need to file small business taxes this year? You might not know where to start.


You aren’t the only small business owner who needs some guidance. The SBA reports that there are more than 30 million small businesses in the U.S., many of which feel they don’t know what they’re doing when filing taxes.


Even if your business has been operating for several years, 2021 isn’t an ordinary year. The COVID-19 pandemic has resulted in some unforeseen changes regarding small business taxes. When you file with a plan, you can use these changes to your advantage.


Before COVID-19, the most recent major changes came in 2018 because of the Tax Cuts and Jobs Act. As 2021 rolls around, businesses will have to digest these changes and the new ones made because of COVID-19. 


Read on to learn more about what you should know about and how to prepare for the 2021 tax season as a small business owner.

What Are the Types of Small Business Taxes?

Small business taxes will differ based on the structure of the company. The five primary ones to familiarize yourself with are:

  1. Income: All businesses except partnerships file annual income tax returns.
  2. Self-employment: You will pay this tax to cover your Medicare and Social Security obligations.
  3. Employment: If you have employees, you will have taxes related to their Medicare/Social Security, federal unemployment, and federal income taxes.
  4. Excise: Certain products like alcohol, tobacco, and fuel carry an excise tax.
  5. Estimated: Some businesses will have to pay quarterly estimated taxes if they don’t have sufficient amounts withheld.

What Changes Are Specific to 2021?

The U.S. government took drastic measures to lessen the coronavirus’s impact on the economy. Here are some new tax programs and changes it created:

  • Coronavirus Aid, Relief, and Economic Security Act (CARES) Act: The CARES Act launched the Paycheck Protection Program (PPP). This is an emergency loan that granted billions of dollars to small businesses. Any money you received through the PPP is a forgivable loan. It is not considered taxable income for 2020 as long as you used the money to fund rent, utility payments, and payroll,
  • Business interest expense deduction increases: The CARES Act increased the allowable business interest expense deduction from 30% to 50% of adjusted taxable income.
  • Economic Injury Disaster Loan (EIDL): The SBA (Small Business Administration) expanded the EIDL program to help businesses recover from economic slowdowns and mandatory shutdowns caused by the virus.
  • Employee Retention Tax Credit (ERTC): The ERTC was created to help businesses retain their staff members. Eligible employers can receive a tax credit equal to 50% of qualifying wages, up to $10,000 per employee.
  • Families First Coronavirus Response Act (FFCRA): The FFCRA required some small businesses to provide leave for employees who were affected by the virus. If a business made this kind of payment, it is eligible for tax credits of 100% of the leave cost.

Are There Any Previous Tax Changes I Should Remember?

The 2018 tax reform law produced some important changes you should be aware of:


Deductions for Pass-Throughs & Corporations

The Tax Cuts and Jobs Act of 2018 provides a 20% deduction for pass-through businesses (companies structured as partnerships, sole proprietorships, limited liability companies, and S-corps).


Net Operating Loss Changes

Net operating losses (NOLs) arise when a business’s tax deductions are higher than its taxable income. 


You can no longer carry NOLs back for two years. Rather, you can apply them for an indefinite amount of time going forward. 


This change has encouraged businesses to take risks, spend more money, and contribute to the economy’s re-growth.


First-Year Bonus Depreciation

The 2018 reform changed the first-year bonus depreciation deduction to 100%.


This means that a small business can deduct the full amount of equipment and property purchases instead of writing them off as portions of their expenses. As a result, the company will have more money upfront to hire workers or invest in the company.

Will There Be Deadline Extensions in 2021?

As you probably know, the U.S. government granted deadline extensions for companies filing in 2020. As of right now, it is unclear if there will be similar extensions granted in 2021.

Tips to Remember as You File in 2021

A certified public accountant (CPA) can certainly help you file properly. However, you shouldn’t be completely out of the loop. Here are some tips to keep in mind:

  • Think about taxes year-round: Don’t wait until the last minute to start preparing your taxes. This can result in more complications and fewer opportunities to save money.
  • Stay on top of law changes: Educate yourself on the latest legal changes regarding tax filing. You can use your knowledge to ensure your CPA is doing the best job possible.
  • Never make assumptions: Don’t assume that the government will enact certain policies or pass tax breaks.
  • Incorporate in the right state: It may be advantageous to incorporate your company in a different state than you run it in. States like Wyoming, South Carolina, and Colorado are advantageous places to file in.
  • Don’t aim for a refund: If you get a refund, it means you overestimated the amount of taxes you paid. This money could have been reinvested back into your company.
What Tax Deductions Can I Make as a Small Business Owner?

Wondering what tax deductions you can make for your small operation? While not all-inclusive, this list gives you a good idea of what deductions you can make:

  • Rent
  • Home Office
  • Advertising
  • Utilities
  • Employee Salaries
  • Travel

Some expenses will require some planning. For example, if you use a vehicle for company purposes, you can itemize specific costs or follow the simple deduction of 57.5 cents per mile for 2020.


There’s no denying that 2021 is a confusing time for business owners and tax policies as a result of COVID-19. As a small business owner, you can protect your company by staying on top of the U.S. regulations regarding taxes this year. 


Remember that the (SBA) and Internal Revenue Service (IRS) are the most reliable tax resources for small companies. These resources can help you understand your tax obligations. 


However, you should always work with a certified public accountant (CPA) to file your taxes. This way, you will ensure that you pay the right amount and comply with the most up-to-date regulations.

A guy hands over a credit card to a store clerk.

Should You Use Your Business Credit Card for Personal Expenses?

Keeping your business and personal finances separate is age-old advice. It’s sometimes easy to blur the line, though, especially for small business owners and independent contractors. Most people with a business card wonder if it’s really such a bad idea to use it for personal expenses.

There are some advantages to charging personal expenses on your business card, but there are also a number of risks. If you’re wondering whether you should use your business card on something personal, you should understand how business and personal cards differ and what may happen if you violate your card agreement.

Pros of Personal Spending on Business Card

One of the main reasons people put personal charges on their business card is because it protects their credit score. Most credit card companies only report business card activity to business credit bureaus. You don’t have to worry about your personal score dropping unless your business account becomes delinquent. Making purchases on your business card can help you protect your own credit score by keeping your utilization low.


Business cards often have higher rewards, bonuses, and incentives. If you make a lot of purchases, this can add up. Business cards often have higher credit limits, too. The benefits of the business card may be much better than a personal card if you don’t have a high credit score.

Cons of Personal Spending on Business Card

The cons of personal spending on your business card definitely outweigh the pros. This can lead to messy finances and complicated taxes. You’ll have to comb through your credit card statements to separate all of the business and personal purchases, which is tedious and time-consuming. If you overstate your business expenses on your taxes because they’ve been mixed up with personal spending, you may increase your risk of an audit.


Most business cardholder agreements prohibit personal spending on the card. If the lender discovers that you broke your agreement, they may cancel the card. Some business cards have higher fees and interest rates, too.


Business cards have fewer protections than consumer cards, so it’s much safer to use a personal card whenever you can. The Credit Card Act of 2009 outlined many consumer protections, but not all of them apply to business cards. Your credit card company can raise your interest rate and lower your credit limit at just one sign of financial hardship. They also can charge over-limit fees, and there’s no cap on late fees.


Mixing business and personal spending can even lead to legal issues. If you run a corporation or limited liability company, you aren’t personally responsible for your business debts. Typically, someone who sues your company can only recover from your business assets. However, if you’ve used your business funds for personal expenses, the court may open up your personal assets for recovery.

What You Should Never Charge to Your Business Card

It’s very difficult for a credit card issuer to tell whether a purchase you make is for personal or business reasons. However, there are some purchases that are more likely to land you in hot waters than others.


You should not put extra personal expenses from a business trip on your business card. Many people like to add a few extra days to their trip just for fun, but putting these charges on your business card is a slippery slope. The expenses can quickly add up.


Be careful with client entertainment as well. This is a valid expense within reason, but dinners every night or multiple trips per year is excessive and may look suspicious to your credit card company.


Try to avoid using your business card for big purchases, too, especially personal ones. Although your business card may have a lower interest rate than a personal card, it’s still much higher than a loan. Big purchases can accrue a lot of interest if you carry the balance for more than a month.

Should You Charge Your Business Card for Personal Spending?

To be safe, you should not use your business card for your personal expenses. Occasional purchases probably won’t raise any red flags with your credit card company, but it’s easy for the personal spending to get out of control.


To avoid impulse purchases, you should have clear boundaries for what does and doesn’t count as a business expense. Keep your business card separated from your personal card in your wallet so that you don’t grab it accidentally. Each month, review your credit card statement carefully to make sure there weren’t any personal purchases.


When you put personal expenses on your business card, you complicate your taxes, violate your cardholder agreement, and put your limited liability status in jeopardy. To keep your finances safe and organized, it’s best to keep your business and personal spending separate.

Final Thoughts

At Bumgardner Morrison, we’re here to assist with your accounting service needs. If you have questions about your business credit card spending or are looking to get your business finances in order, contact us today to schedule a consultation.

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BMC Newsletter, Volume 4, Issue 3

BMC Newsletter, Volume 4, Issue 3
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We have a wealth of experience in the financial services industry.

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BMC Newsletter, Volume 4, Issue 2

BMC Newsletter, Volume 4, Issue 2
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We have a wealth of experience in the financial services industry.

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BMC Newsletter, Volume 4, Issue 1

BMC Newsletter, Volume 4, Issue 1
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Have you met our team?


We have a wealth of experience in the financial services industry.

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BMC Newsletter, Volume 2, Issue 5

BMC Newsletter, Volume 2, Issue 5
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Have you met our team?


We have a wealth of experience in the financial services industry.