Are we in a recession, which is defined as a significant decline in economic activity or two consecutive quarters of GDP contraction (something we’ve already had)? Some experts nonetheless argue that we’re not there yet, but is a recession on the horizon? We know from past experience that the experts don’t know any more than we do. Recall the dire predictions of a recession at the end of 2018 that drove the stock market down in December 2018. And it turned out that 2019 was a boom year. Nonetheless, it’s a smart business strategy to follow the proverb to prepare […]

As students head back to school, employers should take note of some important implications for their business. Employees, with and without children, may be thinking about education and the upcoming school year. What to consider and how to prepare: Dependent care Flexible Spending Accounts (FSAs) Employees with school-age children may need to pay for after-school care, and this may be pricey (depending on location and the nature of the care). Dependent care flexible spending accounts (FSAs) enable employees to pay this personal cost on a pre-tax basis. The annual contribution for 2022 is capped at $5,000 ($2,500 if married filing separately), […]

Are employers responsible for their employees’ financial health? Should they act in loco parentis (a Latin phrase meaning in place of the parent)? You may think the answer is no, but given the aftershocks of the pandemic and the “great resignation,” it’s becoming a fact of company life that employers have some responsibility in helping employees with their financial wellbeing. Small businesses can only afford to pay so much in wages in order to maintain a profit margin, and it’s especially challenging to do this in today’s high inflationary environment. So, they can’t create financial wellbeing, but they can contribute […]

When starting in business you want to use all the resources you can, and that includes family members if you have them and they’re ready and willing to help. Here are some ways in which you can leverage family to help you get started. But beware: there are drawbacks to consider. Your business may be of finite duration, but family is forever, and you want to be sure and preserve relationships above all else. How family can help get you started: Financial support Parents, grandparents, siblings, cousins, and other family members may be a great source of funding your business. […]

Almost all small businesses in the U.S. are pass-through entities—sole proprietorships, partnerships, limited liability companies, and S corporations. When it comes to small businesses, of those with no employees (other than owners), 98.5% are pass-throughs and of those with employees, 77.5% are pass-throughs. These entities have been touted as a way to avoid double taxation. C corporations are taxed, but dividends paid to shareholders are not deductible by the corporation although taxed…again…at the shareholder level. But in today’s tax and economic environment are pass-throughs the best entities to use for conducting business? Should pass-throughs consider switching to C corporation status? […]

The First Amendment to the U.S. Constitution guarantees that the government will not interfere with the free exercise of religion or limit free speech. But we know that there are limits. The question for private employers is how these constitutional protections square with business policy. When and to what extent can an individual’s First Amendment rights be curtailed within the workplace? It can be a slippery slope. What the Supreme Court has to say  In June, the U.S. Supreme Court said a high school football coach had the right under the Free Exercise and Free Speech Clauses of the U.S. Constitution […]

When you go into business, the government is your silent partner in more ways than one. The government takes a chunk of your profits in the form of taxes. The government tells you what you can and cannot do (the rules and regulations applicable to your industry and location). And the government requires that you have certain licenses and permits to operate legally. Overview of licenses and permits Depending on what your business is about and where you’re located, you may be required to have one or more licenses and/or permits. Licenses and permits are issued by federal, state, and […]

IT process automation is the use of digital technology to perform or process a workflow or function. The use of IT process automation is a growing trend. According to one report last year, 63% of small and mid-sized businesses said automation allowed their company to quickly pivot as a result of the pandemic—whether it was bringing their goods and services online or changing their business model completely. There are many good reasons for this. Here are some to consider. Technology has made life both easier and more complex, but the benefits can’t be ignored. IT process automation can improve your […]

The word “income” is a generic term for the accretion to wealth. The word “income” connotes wages and earnings from self-employment. But for tax purposes, there are different income terms used for various limitations and opportunities. If you want to do tax planning, it’s helpful to understand how “income” impacts what you’re trying to accomplish. The following are the tax terms for income that are relevant to small businesses. Tax terms for income that are relevant to small business Gross receipts Gross receipts is a business term used to describe what a business takes in from the sale of goods […]

During COVID-19, many employees working from home got used to having their pets close by. After all, 70% of households have a pet. With employees returning to the workplace, some want to have their pets with them. And customers are out and about with their pets. Can you or should you permit pets in the workplace? It’s helpful to think things through and create a pet policy that works for your business. What to think about as you craft your pet policy: Consider how it helps employees There are benefits to allowing employees to bring their pets to work: Health […]

Work-life balance is defined by Business Daily News as “the state of equilibrium where a person equally prioritizes the demands of one’s career and the demands of one’s personal life.” There’s been a big emphasis on remote work arrangements as a way to improve work-life balance for employees, especially for those with children and responsibilities outside of work. For small business owners like me, it’s more a matter of lifestyle than a balancing act. Here’s why. Why lifestyle trumps balancing Work-life balance strives to achieve fewer work hours to create more time available for personal pursuits. That’s not the goal of […]

If you are an employer, you are required to deposit your employment taxes on a regular schedule that’s dependent on the usual amount of the deposit. Most small businesses are on a monthly deposit basis, which requires employment taxes to be deposited by the 15th day of the following month. But what happens if you fall behind because you lack the funds to make the deposit? Here are some ideas to help when you fall behind in tax deposits. Pay it off When cash flow becomes a problem, it may seem easy to duck employment tax deposits. You think it’s just […]

There’s been much discussion about “taxing the rich” and making them “pay their fair share.” What may get lost in the discussion are the special taxes already being levied on certain higher income taxpayers—which include many small business owners—in addition to regular federal income tax. One of these special taxes is on earned income and the other on investment income (with certain adjustments). Understanding them is important (1) to better project estimated taxes each year and (2) to have a realistic take on what is actually paid by affected taxpayers. This is especially important for small business owners, who may […]

Gas prices at the pump have nearly doubled in one year, causing severe strain on business budgets. This is especially so for businesses that are based on driving, such as delivery services, or that feature deliveries as part of their offerings. Businesses can ameliorate this strain somewhat by being able to deduct the cost of business driving. But the tax rules for doing this are complicated and businesses must make decisions to optimize their write-offs. The following is an overview of the tax rules and is not meant to be a complete treatment of them. An overview of tax rules […]

“There are two things people want more than sex and money: recognition and praise.” — Mary Kay Ash, Founder of Mary Kay Cosmetics Small business owners know it’s important to recognize the achievements of employees. It’s been reported companies with formal recognition programs have 31% less turnover and are 12 times more likely to have strong business outcomes. But what about recognition for companies and their owners? It is important too. What form can this recognition take? Importance of recognizing small business owners Small business owners self-define their success and don’t necessarily seek out recognition or praise. Success may be in […]