5 New Year’s Resolutions for Businesses

By Ben Kinsey, CPA

Image courtesy of flickr

With January less than a week away, I thought I’d take the time to remind you that not only individuals should consider making resolutions for the new year.  So should every business owner.  That’s because if you start off the new year with the right goals in mind, it will only make it easier to help you keep your cash-flow positive and make the bumps in the road smaller.

How Far Will You Go When You Need to Grow?

By Ben Kinsey, CPA

Image courtesy of flickr

Being in business is a lot like being a dinosaur.  If you don’t evolve, you’re doomed to become extinct.  If you believe Fortune Magazine, they stated that 9 out of 10 startup businesses are doomed to fail.  While that statistic is shocking, what’s even worse is that the top three reasons startups fail is because there is either little or no demand for their product, they run out of funds, or they don’t have the right team.  It isn’t until numbers four, five and six that Fortune points out that some businesses fail because they are outgunned, overpriced or they ignore their customer’s needs.

Are Your Customers Ruining Your Business?

By Ben Kinsey, CPA

Image courtesy of Max Pixel

When it comes to owning a business, most owners and managers are looking to find one thing above all else: More customers.  More customers mean more revenue. That’s got to be good if you hope to build your business, right?  Not necessarily so, as you’ll find out shortly.  Just as with many things in life, quantity doesn’t always trump quality.  In fact, too many clients can be a death knell for a business if you aren’t careful.  Don’t believe it?  Read on and learn.

So, You Want to Sell Your Business

By Ben Kinsey, CPA

Image courtesy of flickr

One of the reasons to own a business is to eventually sell it.  Whether the motivation to sell is to retire or simply to start another business is immaterial.  The most salient thing you need to consider if you hope to consummate a sale is to make the sale appealing to the buyer.  To accomplish that, you need to understand the process involved, the mistakes to be avoided and the time it takes to create a sellable business.

New Rules Benefit Contractors and Retailers

By Ben Kinsey, CPA

Calling all small contractors!  

Image courtesy of flickr

I have good news for contractors concerning long term construction contracts.  The 2017 Tax Act can save you money and reduce your accounting hassles. As long as your business does less than $25 million in gross receipts and the contract duration is over a year in length, you will be able to use cash accounting as opposed to the percentage of completion method you are currently forced to embrace.  In the past, long term construction contracts had to be reported using the percentage of completion method.  This method was very cumbersome to employ, since it required the contractor to even out the reporting of income over the life of the contract, regardless of the income collected. To use this method, all contractors were required to keep detailed accounting records of each period during the contract.

Sales Tax Shuffle

By Ben Kinsey, CPA

Image courtesy of flickr

Ben Franklin said it best when he coined the phrase, "In this world nothing can said to be certain, except death and taxes."  But as all business owners know, while death calls but once, there are many different kinds of taxes they are expected to pay at different times of the year. While income taxes are paid but once a year, business owners are required to frequently pay sales tax on many of the things they sell, as well as a number of things they buy.  The second kind of sales tax is referred to as Use Tax.

Can Professionals Capitalize on the Same 20% Deduction as Other Businesses?

By Ben Kinsey, CPA

Image courtesy of Pixabay

In my previous blog, Do the Right Thing & Save 20%, I covered the new tax laws in effect that allow many businesses to capitalize on deductions that apply to overflow income (business income minus your salary). The only rub is this deduction specifically excludes professionals. That’s the bad news. The good news is in today’s blog I will reveal how realtors, accountants, doctors, dentists, CPAs, engineers and any other business owners that provide a service may still have an opportunity to capitalize on this 20% deduction. 

Do the Right Thing & Save 20%

By Ben Kinsey

Image courtesy of wikimedia

For all active business entities in the US that are not rental properties or hobbies, there is a new 20% business deduction that applies to your overflow income. (This is your income minus your salary) Salary, in this case, is important since the only way you can take the 20% deduction is if you take a salary, or in the case of a partnership, a guaranteed payment.  The term the IRS uses to describe this is Qualified Business Income. 

Come Hell or High Water – New Disaster Tax Relief Provisions

Courtesy of Wikimedia Commons

By now, most Americans have heard of the devastating wildfires that have destroyed property and claimed lives in California.  What many are not aware of is the fact that President Trump recently signed into law the Bipartisan Budget Act of 2018, which among other things was designed to help Californians hardest hit by fire damage.  Normally a personal casualty loss incurred by wildfire is an itemized deduction.  Under the new Act, qualified losses are now deductible as well.

How Reasonable is Your Compensation?

By Paul S. Hamann & Jack Salewski, CPA, CGMA

Courtesy of Creative Commons Images

The IRS requires “Reasonable Compensation” be paid to S-Corporation Shareholders and General Partners in a Partnership in order to avoid a notice or audit.  The question, therefore, is, “What is reasonable?”  Below are three methods to determine a reasonable salary with a focus on the Cost Approach preferred for closely held entities which represent the majority of clients in my practice.

The Three Methods of Determining Reasonable Compensation 

It is important to match each method with the business’ size and business owner’s job duties.