Why would you consider thinking about a recession when we’re in the middle of a boom economy? Because every boom is followed at some time by a bust. No one knows when such a bust will occur, how severe it will be, and how long it will last. But it can’t hurt to spend time now making sure you can withstand an economic downturn. Watch your expenditures The Federal Reserve (“the Fed”) said in late November 2018: “High leverage has historically been linked to elevated financial distress and retrenchment by businesses in economic downturns.” In plain English, the current level […]

There are dozens of numbers used for benefits, limitations, thresholds, and other rules for various tax breaks that can be adjusted annually for inflation. The limitations for retirement plans and IRAs for 2019 were covered in a previous blog. Now the IRS announced the new numbers for 2019.   Here is a roundup of the new numbers important to small businesses and entrepreneurs in the year to come (they’re listed in the order in which they appear in the Tax Code and not in order of importance). Small employer health insurance credit. The average payroll limit to be able to take a […]

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 […]

According to PWC’s 2018 Employee Financial Wellness Survey, 54% of employees feel stressed about their finances. What does this mean in your workplace? Impact of stressed employees Financial stress isn’t merely the problem of employees; it impacts employers as well. A report 2 years ago estimated the cost to companies for employees with the lowest levels of financial wellness at $94 to $198 each annually. The financial issues for the company can be: Absenteeism Low productivity Garnishments Delayed retirement Helping employees to improve their financial wellness can help address each of these issues. And it can create more employee loyalty, […]

Want to create a multi-million dollar nest egg … in addition to the value of your business? This is possible by making sure you’re covered by a qualified retirement plan and maximizing contributions to it on your behalf. In addition, you’ll help employees save for their retirement. As you begin to plan for the coming year, take into account changes in the dollar limits for certain retirement plans as well as for certain employee benefits. 401(k) plans If you offer, or expect to offer, this type of retirement plan in 2019, the maximum salary reduction contribution by an employee is […]

A McKinsey & Co. study found that raising prices 1% with no change in demand could mean an increase in profits of 11%. Inflation for 2018 is running at about 2.3%, so this generally means you can expect to pay more for the goods and services your business uses. With a tight labor market, you’re likely to increase wages for the coming year at an even greater rate. These conditions mean one thing: it’s probably time to raise your prices. Concerns about raising prices Naturally, you fear that raising prices will reduce demand. You need to determine the impact of […]

The Tax Cuts and Jobs Act created a new personal deduction, called the qualified business income (QBI) deduction, for owners of pass-through entities that is effective starting on 2018 returns. The deduction cuts the effective tax rate on your business income.  Sole proprietors, S corporation shareholders, partners, LLC members, and self-employed independent contractors should familiarize themselves with the rules for the QBI deduction.  Here are 10 things to know about it. 1. The new deduction is based on only certain pass-through income The QBI deduction, also referred to as the Section 199A deduction (based on the Tax Code provision covering it) is […]