A Conversation With ... Dean Young

Heim Young & Associates Inc. employs 20, including four certified financial planners. Tell us more about the firm, which turns 24 in March.
We provide independent financial planning. We don’t work for anyone other than our clients and that gives us the ability to develop financial plans based around our client’s goals and then implement those plans within a company or strategy that makes sense. We are not tied to any company, whether it’s insurance or a mutual fund company – we are truly independent. We also focus on service. We meet with our clients on a regular basis and provide educational seminars throughout the year.

Jan. 22 was the first day to transmit e-file claims to the Internal Revenue Service. With tax season now in full swing, what tips can you give business owners preparing to file, and what should they be doing to prepare for next year?
With the restoration of the payroll tax, everybody who pays payroll taxes is seeing a bit of a pinch. There are about 77 million taxpayers that are paying more taxes in 2013. I think you have to plan out early in the year how to offset some of those potentially higher income tax rates later. If your business is profitable, even if you are plowing money back into the business, you may find yourself in a higher tax bracket this year and having to pay additional taxes. The best way I know to overcome that is to make prudent tax-favorable investments in retirement plans or equipment.

Are there any new tax laws we should be aware of?
Married couples that show taxable income of $250,000 will pay additional taxes and additional Medicare taxes. The new 39.6 percent tax bracket kicks in for a married couple at $450,000 of taxable income and $400,000 for a single person. There could potentially be people in the highest tax bracket paying around 50 percent of their taxable income. Congress is currently talking about raising income taxes again, using this sequestration issue. They keep making the income tax picture more complicated. The permanent income tax in this country started 100 years ago this year, in 1913, and the original document was less than 10 pages long. Today, there are more than 70,000 pages of tax code.

What’s the biggest mistake you see business owners make when it comes to financial planning?
Oftentimes people aren’t very forward thinking. Business owners are forced to deal with day-to-day issues and don’t budget themselves out a couple of years in advance. It’s not unusual to find a business with a written business plan only when they want to go borrow money from the bank, but folks ought to be doing more long-term planning. It doesn’t mean you can’t revise it later; it just needs to be in place. Less than 3 percent of Americans have a written retirement income plan. If I had a nickel for every time someone told me, “I wish I had started this five years earlier,” I could probably retire myself.

What should business owners be doing right now to prepare for retirement?
Business owners have to think about who is going to take over their business when they are unable. Studies in our industry indicate you tend to do better by grooming people and making the transfer within. Nobody really understands the value of your company more then your key employees who have worked hard and diligently for the company. It’s a matter of grooming those people. I’ve talked to a lot of folks who are so busy working in the business that they don’t have time to work on the business.

You recently ran to fill a vacancy in General Seat D on the Springfield City Council, which chose Mike Carroll of Andy’s Frozen Custard. What did you learn from the process?
Some people approached me and asked if I was interested in considering the seat. I really hadn’t been thinking about it, but I am involved in the community and it was intriguing. I spent a lot of time interviewing people and former city leaders, so from that standpoint, it was a very educational experience. In the end, there is a process you go through and I came in second. I can’t say I wouldn’t consider another seat in the future, but right now my goal is to take on other civic responsibilities and be an asset to this community.