The majority of the more than 2 million farms in the U.S. are small businesses. The USDA says that “in 2016, farms organized as pass-through entities constituted over 98% of family farms and 90% of the total value of U.S. agricultural production.” While the Tax Cuts and Jobs Act made many changes for business in general, it carved out some exceptions and special breaks for farmers. The USDA estimates that the overall effect of tax changes made by this law on family farm households (factoring in changes for individuals and businesses) is a reduction in their effective tax rate. Depreciation […]

It’s an unfortunate fact that the chances of becoming disabled are too high to be ignored. According to Council for Disability Awareness, 1 in 4 of today’s 20 year-olds will become disabled before they retire. Yet less than half (49%) of working adults in the U.S. have disability insurance (other than basic Social Security coverage or workers compensation). What to do? Sick days Your company may offer a set number of paid sick days. Unused days may or may not carry over to the following year. Obviously sick days are only a stopgap measure and won’t cover any employee for […]

Business owners who are self-employed usually pay their taxes in four estimated tax payments for the year. The final installment for 2018 is due on January 15, 2019. The first installment of estimated tax for 2019 is due on April 15, 2019. Figuring estimated taxes correctly is important so you don’t overpay and have to wait for a refund or underpay, which can result in penalties.  In the past several years, some owners have deliberately underpaid estimated taxes because the IRS penalty was so low. But with interest rates rising, this strategy is going to be costly. Here are some […]

The start of a new year is a great time for small business owners to reflect on the kind of leaders they are or should be. Ray Kroc, founder of McDonalds, said: “the quality of a leader is reflected in the standards they set for themselves.” Because there are many qualities that go into being a great leader, I’m going to focus on them one at a time … one each month. I’ve identified 12 qualities to be examined and how to develop them in yourself and your employees: Delegating Confidence/courage/inspiration Listening/communicating Integrity/honesty Decisiveness Creativity/vision Empathy/patience Openmindedness Grit Vision Taking […]

Most tax rules are fixed and you must follow them. But there’s some flexibility which is provided through special tax elections. You can choose in some situations to do or not do certain required things.  Here is a roundup of some elections you may want to consider with respect to your 2018 return or think about them as an option for 2019. Writing off equipment purchases If you bought and placed in service equipment or certain types of property, you have some choices to make. In making these choices, consider the impact they have on other tax breaks. Whether you want […]

According to History.com, the concept of New Year’s resolutions dates back about 4,000 years to the Babylonians who recorded their resolutions during a religious festival that started their new year (which happened to fall in March). These resolutions took the form of promises to their gods. Making personal New Year’s resolutions to save money, lose weight, quit smoking, read more, or something else is common practice today. Business owners may want to make their own New Year’s resolutions. Last year I shared New Year’s resolutions for businesses and business owners from various sources. I thought it would be great to […]

Media headlines may have been hogged by politics, natural disasters, and the deaths of well-known people, such as President George H.W. Bush. But buried below the headlines is some important news for small businesses this year. Here are some of the news items to note: Small business optimism Just review the monthly NFIB Small Business Optimism Indexes throughout the year to see that optimism among small business owners remains high. For example, the most recent index—November 2018—found that the reading of 104.8 continues the exceptionally strong two-year trend. Tax changes In January, most of the changes from the Tax Cuts […]

I’m proud to say it’s the 25th year of the original publication, and it’s all new for 2018 returns and year-round tax planning. The new edition, named the #1 New Release by Amazon, includes changes made by the Tax Cuts and Jobs Act as well as other developments small business owners need to know. As has been my practice, I’ve written my own book review to explain the purpose of the book, what’s new, and what’s ahead. Why small business owners need a tax book If you are like the vast majority of small business owners (86%), your accountants or […]