IRS Increases Business Mileage Rate Effective July 1, 2026
The IRS has announced an increase to the standard business mileage rate for the second half of 2026. Beginning July 1, 2026, the rate increases from 72.5 cents per mile to 76 cents per mile for business miles driven. 2026 Business Mileage Rates January 1 – June 30, 2026: 72.5¢ per mile July 1 – […]
How a lockbox (or other) service can benefit accounts receivable
Businesses have long used bank lockbox services to accelerate collections and reduce work involved in processing checks. Now, technology enables lockbox users to automate many accounts receivable procedures. But other electronic payment methods, including ACH and credit cards, may provide less expensive, yet effective, solutions. To determine what makes sense for your organization, evaluate the volume of paper checks you receive. If it’s high, you might benefit from a lockbox service. Otherwise, consider accepting paper checks while steering customers to electronic methods. Talk to your bank about its services, and contact us for help calculating your current payment-processing costs.
Disability benefits may have income tax consequences you don’t expect
Disability insurance is a valuable benefit provided by many employers. It replaces a portion of the insured person’s income — typically 45% to 65% of pre-disability earnings. But in some cases, income taxes can take a bite out of disability benefits.
Taxability usually hinges on who paid the premiums. If your employer paid them, the payouts from the policy generally will be taxed to you just as if the income were paid directly to you by your employer. If you paid the premiums, the payments you receive generally won’t be taxable. State tax treatment of disability benefits varies.
We can help you assess how much disability coverage you need depending on the tax consequences and other factors.
Tax essentials for sole proprietors
Sole proprietors: Are you on top of your federal tax obligations? Even if your business is small, tax compliance and planning are a big deal.
In addition to reporting business income and expenses, you may owe self-employment tax and need to make quarterly estimated payments. You might also need an employer identification number (for example, if you hire employees). State and local income, sales, payroll, and other tax requirements may apply, too. Careful planning can help you maximize deductions and choose the right retirement plan for your situation.
Contact us to learn more about the tax aspects of being a sole proprietor, including the reporting and recordkeeping requirements.
Professional valuations provide businesses with more than a number
A business valuation prepared by a qualified professional can play a critical role in transactions and strategic decisions. These include business sales, M&As, litigation, estate planning and buy-sell agreements. Because valuation professionals analyze a wide range of qualitative and quantitative factors, the process can reveal opportunities to boost performance and maximize return on investment. Understanding key concepts — including fair market value, fair value, going-concern value, and valuation premiums and discounts — helps owners interpret results and make more informed decisions. Contact us to learn more.
Tax tips for parents with kids heading to college this fall
If your child is heading to college this fall, tax breaks may be available. For example, you might be eligible for the American Opportunity Tax Credit (AOTC) of up to $2,500 per student for the first four years of college. But the AOTC is phased out for married joint filers with modified adjusted gross income between $160,000 and $180,000 (between $80,000 and $90,000 for heads of households).
If your child has a tax-advantaged education account, such as a 529 plan, tax-free withdrawals can be taken to pay qualified expenses. But expenses paid with tax-free withdrawals can’t be used to claim the AOTC.
Contact us to discuss these and other tax tips for your situation.
Could the New Markets Tax Credit benefit your business?
Recent tax law changes made the New Markets Tax Credit permanent. This program encourages private investment in economically distressed communities by offering federal income tax credits to qualifying investors.
If your business invests in a certified community development entity (CDE), you may be eligible for a credit equal to 39% of your investment over seven years. Alternatively, your business may benefit indirectly by receiving CDE financing for renovations, equipment, expansion or other eligible projects in qualifying low-income communities.
Contact us to learn more. We can help you estimate the potential tax or financing benefits and comply with the applicable requirements.
Ideas for negotiating smarter, not harder
The success of business negotiations shouldn’t hinge on winning at all costs. Instead, you and the other party must create value for both sides. Whether you’ll be negotiating with customers, vendors, lenders or others, prepare for the meeting by identifying what you want — and when you’ll walk away. During negotiations, protect your business’s position by making only small and deliberate concessions. To preserve the relationship and maintain your reputation for fair dealing, don’t overreach and generally avoid ultimatums. Contact us for help identifying your deal’s financial parameters and integrating them into your negotiating strategies.
When an employee’s Form W-4 raises red flags
Your employees use Form W-4, “Employee’s Withholding Certificate,” to tell you how much federal income tax to withhold from their pay. Most forms are routine, but an altered certificate, unusual accompanying statement or IRS lock-in letter may require special handling.
Employers generally aren’t responsible for verifying the information employees provide on W-4 forms. However, you must reject invalid forms, apply proper withholding rules when no valid form is on file and follow IRS withholding instructions. Reviewing your payroll procedures now can help prevent costly errors. Contact us for guidance on W-4 compliance and other payroll withholding issues.
The right financial guidance can help maximize your business’s potential
Today’s business owners need a trusted financial advisor on their side. After all, you have a lot to keep track of. Staying on top of your finances requires up-to-date, accurate bookkeeping and regular reviews of professionally prepared profit and loss statements, balance sheets, and cash flow statements. The right advisor can help you prepare these necessary records, evaluate expansion plans and financing options, and suggest ways to improve cash flow. Contact us to learn how we can help you make smarter strategic decisions and position your business for future success.
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