Newsletters

Small Business IRS Audit Mistakes In late 2020, the IRS announced that it will increase tax audits of small businesses by 50 percent in 2021. Here are several mistakes to avoid if you do get audited by Uncle Sam. Mistake: Missing income. A long history of investigating has led IRS auditors to focus on under-reported income. If you’re a business that handles cash, expect greater scrutiny from the IRS. The same is true if you generate miscellaneous income that’s reported to the IRS on 1099 forms. Be proactive by tracking and documenting all income from whatever source. Invoices, sales receipts, profit and loss statements, bank records—all can be used to substantiate income amounts. Mistake: Higher than normal business losses. Some small businesses struggle in the early years before becoming profitable. If your company’s bottom line never improves, the IRS may view your enterprise as a hobby and subsequently disallow certain deductions. As a [...]

Upcoming dates: June 15 Second quarter Individual & S Corporation Estimates are due Please call if you would like to discuss how this information could impact your situation. If you know someone who could benefit from this newsletter, feel free to send it to them. Know This Number! Knowing your net worth and understanding how it is changing over time is one of the most important financial concepts that everyone needs to understand. This number is used by banks, mortgage companies, insurance companies and you! Your net worth impacts your credit score, which in turn impacts your interest rates and things as mundane as the amount you pay for auto insurance. A simple definition Net worth is the result of taking all the things you own (assets) minus what you owe others (debts and liabilities). Assets include cash, bank account balances, investments, your home, vehicles or anything else that you could sell today [...]

Upcoming dates: May 17 - Individual income tax returns for 2020 are due Tax day is finally here! Please call if you would like to discuss how this information could impact your situation. If you know someone who could benefit from this newsletter, feel free to send it to them. Building a Fortress Balance Sheet The best way to weather a storm is often by being prepared before the storm hits. In the case of small businesses, this means building a fortress balance sheet. What is a fortress balance sheet? This long-standing idea means taking steps to make your balance sheet shockproof by building liquidity. Like a frontier outpost or an ancient walled city, businesses that prepare for a siege—in the form of a recession, natural disaster, pandemic, or adverse regulatory change—can often hold out until the crisis passes or the cavalry arrives. Building a fortress balance sheet isn’t just a good idea [...]

Upcoming dates: May 17 - Individual income tax returns for 2020 are due Because the IRS is still playing catch-up from last year, in addition to new tax laws passed in the middle of this year's tax filing season, the April 15 individual tax return deadline was moved to May 17. Read about how these new tax laws affect both your 2020 and 2021 tax returns. Also read about extended tax breaks for businesses. ALERT! Late Tax Legislation Creating Havoc Individual tax return deadline moved to May 17 Congress' recent move to retroactively make a portion of 2020 unemployment income tax-free is creating havoc during this year's tax filing season. Here is what you need to know. Background Unemployment compensation was received by millions of Americans during 2020 because of the pandemic. While unemployment income was necessary for many who lost a job, it’s also normally classified as taxable income to be reported [...]

Upcoming dates: March 15 - Due date for partnership and S corporation tax returns (Forms 1065, 1120S) Reminders - Daylight saving time begins Sunday, March 14 Spring is almost here! With April 15th right around the corner, get answers to common tax questions in this month’s newsletter. Also included is a look at how bank reconciliations still play an important part of your financial health and a reminder to every small business owner to classify their workers correctly or pay a heavy price with the tax authorities. Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them. Answers to Common Tax Questions With the April 15 tax filing deadline right around the corner, here are answers to some common tax questions. When will I get my refund? The pandemic and additional [...]

Upcoming dates: February 15 - Presidents' Day Reminders - Organize filing records (1099s, 1098s, W-2s, etc.) - Schedule tax appointment for drop off or meeting - Begin tax planning for 2021 As the tax filing season gets underway, now is a great time to review some tips to help ensure your tax return is processed without a delay. Also included are reminders of some surprising tax situations this year because of the pandemic. For small businesses there are some organizational hints that seem to work and a thoughtful article for all of us to consider about how we tend to undervalue the worth of our personal identities. Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them. 4 Ways to Make Sure Your Tax Return Doesn’t Get Stuck Here are four [...]

Upcoming dates: January 15 - 4th Quarter Estimated Payments Due Start tax filing for 2020 - Organize filing records (W-2s, 1099s, 1098s, etc.) - Schedule tax appointment for drop off or meeting Start tax planning for 2021 - Create simple budget - Adjust withholdings - Rebalance investment portfolio The new year begins with more stimulus payments and other financial assistance courtesy of the latest COVID relief legislation. Read about how the new bill affects your tax and financial outlook. Also in this month's edition is good news for business owners regarding the tax deductibility of expenses paid for using PPP loan funds that are forgiven. You can also determine how much to contribute to your retirement fund in 2021 and see what Uncle Sam came up with for his New Year’s resolutions. Please call if you would like to discuss how this information could impact your situation. If you know someone who can [...]

DECEMBER 2020 Take final year-end actions - Deductible gifts - Capital gains/losses - Charitable giving - Dividend income Working from a home office has become a reality for many of us this year. But what, exactly, are the rules to be able to deduct your home office expenses on your tax return? Read about some ideas to help you qualify for the deduction. Also in this month’s edition is an article outlining common tax surprises, and some ideas for small businesses to build strong, banking relationships during these uncertain times. Please call if you would like to discuss how this information could impact your situation. If you know someone who can benefit from this newsletter, feel free to send it to them. Turn Your Home Office Into a Tax Deduction If you are working from home for the first time in 2020, you may be wondering if your home office is tax deductible. [...]

How to Walk the Tightrope When Raising Prices Raising prices can be fraught with risk during good economic times. So what happens if you try to raise prices during bad economic times? As Hamlet would say, "Ah, there's the rub." If you raise prices, you risk losing clients to competitors. If you don't, decreasing revenue or rising costs can capsize your company. So what's a small business supposed to do? The Art of Pricing Raising (and, sometimes, even lowering) prices can be a balancing act. As with any major business decision, pricing should take into account various factors. Here are several to consider. Analyze costs. First, you need to carefully analyze the costs needed to bring your products or services to market. Such expenses might include raw materials, storage, personnel, advertising, delivery, rent, equipment, taxes and insurance. Failure to cover all these costs in your price will inevitably lead to shrinking profits. Establish [...]

This month: October 15 Extension deadline for individual and C corporation tax returns Does your monthly income seem a little higher than normal? If so, that may actually be a sign of trouble ahead. Find out how a tax trap could be lurking in your paycheck. Also read about your options for what to do with your 401(k) when switching jobs and common mistakes that businesses make with their websites. Is a Tax Trap Lurking in Your Paycheck? Does your paycheck look a little higher than normal? If so, it could be a tax trap. The Problem A payroll tax holiday effective September 1 was recently signed via a presidential executive order. Payroll tax holidays typically provide forgiveness of Social Security and Medicare taxes that are normally withheld from your paycheck. This year’s tax holiday, however, is NOT necessarily a forgiveness of Social Security and Medicare taxes because the order is not yet [...]