Handle with care: Upgrading your company’s accounting software
Every company’s accounting software needs to be secure, user-friendly, and appropriate for its size and needs. To keep all those factors in line, you’ve got to handle accounting software upgrades with care. Here are five fundamental best practices: 1) Plan upgrades strategically; the right tipping point depends on various factors, including your annual revenue. 2) Don’t rely on generic software if an industry-specific solution is available. 3) Mind important details, such as integration and mobile access. 4) Set a detailed budget for your upgrade; beware of over- or underspending. 5) Ask for help; we can assess your current accounting software and determine whether an upgrade is in order.
Is college financial aid taxable? A crash course for families
If your college student is fortunate enough to receive some financial aid, what are the tax implications? It depends. Gift aid, which is money that a student doesn’t have to work for, is often tax-free. There are certain requirements, such as the recipient must be a degree candidate. Gift aid may be called a scholarship, fellowship, grant, tuition discount or tuition reduction. In arrangements that require a student to work in exchange for money, payments are considered compensation from employment and must be reported as income on the student’s federal tax return. However, that doesn’t necessarily mean he or she will owe taxes. Contact us with questions about what’s taxable and what’s not.
DOs and DON’Ts to help protect your business expense deductions
If you’re claiming business expense deductions for meals, a home office, vehicles and other items, the IRS may closely review them. It’s important to comply with the strict tax law substantiation requirements for these expenses. Keep these guidelines in mind: DO keep detailed, accurate records. For each meal expense, record the amount, date, place, business purpose, and business relationship of anyone you dine with. If you reimburse employees for expenses, DO ensure they’re complying with all the rules. DON’T reconstruct expense logs at year end or wait until you receive an IRS notice. Take time to record the details in a log or diary or on a receipt at the time of the event or soon after.
Run a more agile company with cross-training
Business owners: Skilled employees play a huge role in your ability to run an agile company. One way to put them on optimal footing is cross-training. Simply defined, this is teaching employees to understand and perform responsibilities and tasks outside the scope of their primary job duties. Potential advantages include reducing the impact of absences, boosting productivity, gaining fresh perspectives and strengthening internal controls. You may even want to require cross-training for jobs directly related to financial management, sensitive data or high-value customers. Just stay cognizant of employees’ workloads, stress levels and morale. Contact us for help managing the costs involved.
Are you missing a valuable tax deduction for Medicare premiums?
If you’re 65 or older and enrolled in basic Medicare, you may need to pay additional premiums to obtain the level of coverage you desire. These premiums can be significant, particularly for married couples where both spouses are paying them. The good news? You might be eligible for a tax break on those premiums. However, claiming medical expenses on your tax return can be challenging. For the 2025 tax year, medical expenses are deductible only if you itemize — and only the portion that exceeds 7.5% of your adjusted gross income qualifies. We can help you assess whether it’s more beneficial to take the standard deduction or to itemize and include medical expenses on your return.
The One, Big, Beautiful Bill could change the deductibility of R&E expenses
The treatment of research and experimental (R&E) expenses is a high-stakes topic for businesses, especially small to midsize companies focused on innovation. Currently, R&E expenses must be capitalized and amortized over five years for domestic activities and 15 years for foreign activities. The One, Big, Beautiful Bill, which is now being considered by the Senate, would restore the immediate deductibility of R&E expenses. Specifically, it would allow taxpayers to immediately deduct domestic R&E expenses paid or incurred in tax years beginning after Dec. 31, 2024, and before Jan. 1, 2030. Contact us if you have questions about how these potential changes could affect your business.
Business owners can rest easier with sound cash flow management
Slow cash flow is one of the leading causes of insomnia for business owners. The good news is you can rest easier by exercising sound cash flow management. First, scrutinize your selling cycle (how long it takes to develop, market and generate revenue from products or services) and your disbursements cycle (how you manage regular payments to employees, vendors, creditors and others). You want the two cycles to match as evenly as possible. Or, better yet, you want to convert sales to cash more quickly than you’re paying expenses. If a cash crunch appears imminent, consider steps such as slowing growth, reviewing expenses and managing assets differently. Contact us for advice and assistance.
Tax breaks in 2025 and how The One, Big, Beautiful Bill could change them
The U.S. House of Representatives passed The One, Big, Beautiful Bill in May, introducing possible significant changes to individual tax provisions. It’s now being considered by the Senate, which may make a number of changes. What’s in the bill? If enacted, there would be increases in the standard deduction and the Child Tax Credit. The state and local tax deduction cap would increase from $10,000 to $40,000 for those earning less than $500,000. The proposed law would also exempt tip income and overtime pay from federal income tax. But it would generally eliminate tax credits for new and used electric vehicles purchased after Dec. 31, 2025. Contact us with any questions about your situation.
5 tax breaks on the table: What business owners should know about the latest proposals
The One, Big, Beautiful Bill, which is currently being considered in Congress, could significantly reshape several business tax breaks. For example, the bonus depreciation deduction could change. Currently, businesses can deduct 40% of the cost of eligible new and used equipment in the year it’s placed in service (this will drop to 20% in 2026 and phase out entirely in 2027). The bill would restore 100% bonus depreciation retroactively for property acquired after Jan. 19, 2025, and extend it through 2029. Why it matters: A full deduction in the year of purchase allows for faster depreciation, freeing up cash flow. This could be especially beneficial for capital-intensive industries.
Planning a summer business trip? Turn travel into tax deductions
If you or your employees are heading out of town for business this summer, it’s important to understand the travel deduction tax rules. To qualify, the trip must be necessary for business purposes and require an overnight stay within the U.S. You can deduct the actual costs of transportation (such as airfare and taxis) as well as lodging expenses. Business meals are also deductible but limited to 50% of the cost. If a trip includes both business and personal time, only expenses related to the business portion (such as meals and lodging for business days) are deductible. Personal expenses incurred during vacation days aren’t. Contact us for guidance on what’s deductible in your situation.