Avoiding inadvertent S corp termination
S corporation structure provides most of the tax benefits of a partnership plus the liability protection of a corporation. But because of the strict requirements that apply to these entities, preserving S corporation status requires due diligence. To avoid inadvertent termination of S corporation status, among other things, you should continually monitor the number and type of shareholders, scrutinize the terms of any trusts that hold shares, and include provisions in buy-sell agreements that prevent transfers to ineligible shareholders. Also, avoid actions that may be deemed to create a second class of stock, such as making disproportionate distributions. Contact us if you have questions.
Revisiting the balanced scorecard approach to strategic planning
Strategic planning can be challenging for small to midsize businesses that rely primarily on financial reports to make decisions. Introduced in the early 1990s, the balanced scorecard approach offers a proven framework for turning strategy into action by looking beyond the numbers. It organizes planning around four critical areas: 1) customers, 2) finance, 3) processes, and 4) learning and professional growth. By focusing on clearly defined objectives and a limited set of meaningful metrics for each area, you can gain a clearer view of your company’s performance and future direction. Regardless of how you approach strategic planning, contact us for guidance and support.
Not all “business” expenses are tax deductible
With 2025 in the rear view mirror and the tax filing deadline on the road ahead, it’s a good time for businesses to start gathering information about their deductible expenses for 2025. But what’s deductible (and what’s not) might not be as clear-cut as you think. Most business deductions aren’t specifically listed in the Internal Revenue Code (IRC). The general rule is what’s stated in the first sentence of IRC Section 162, that you can write off “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business.” In addition, you must be able to substantiate the expenses. We can help you determine what you can deduct on your 2025 tax return.
What business owners should know about debt restructuring
Debt commonly helps small and midsize businesses fund startup costs, growth, equipment purchases and cash flow. Problems typically arise not because debt exists, but because its terms no longer align with operational realities. If your business encounters such trouble, consider debt restructuring. It involves discussing reasonable solutions with lenders, such as extending repayment periods, modifying payment schedules or consolidating multiple loans. Although often associated with financial distress, restructuring can also be used strategically by healthy businesses to facilitate long-term sustainability. Contact us for help assessing its implications and exploring alternatives.
Consider these issues before providing (or reimbursing) mobile phones
Employees often appreciate receiving mobile phones or reimbursements for business-related personal phone costs. But what seems like a simple fringe benefit can introduce security threats, productivity challenges and tax implications. For example, to help ensure the IRS treats work-issued phones as a nontaxable fringe benefit, you must provide them “primarily for noncompensatory business purposes.” Make sure phones are fully protected against cyberthreats and employees understand when and how they’re allowed to use their phones, particularly when accessing company data. Contact us to discuss potential equipment cost, tax and security issues.
If you suffered a disaster, you may be eligible for a casualty loss tax deduction
Every year, many taxpayers experience damage to their homes or personal property from storms, floods, wildfires or other disasters. For 2025 income tax returns due April 15, 2026, personal casualty loss deductions are generally limited to those due to federally declared disasters. But, effective for losses occurring on or after Jan. 1, 2026, eligible disasters also include certain state-declared disasters. Even when the cause of a loss qualifies you for the deduction, additional limits apply. For example, your deduction is reduced by insurance proceeds received, a 10% of adjusted gross income floor applies, and you must itemize deductions. Contact us for help determining if you’re eligible.
Postmark Changes by the United States Postal Service
Effective December 24, 2025 the United States Postal Service “USPS” postmark will no longer reflect the day you dropped the mail off at a post office or a blue collection box; the date on your mail now reflects when it is first processed at a regional sorting facility. This means mail can be postmarked a […]
Unite your company’s sales team around a USP
A unique selling proposition (USP) is a clear, concise statement that explains the distinct value of your products or services and why customers should choose your business over the competition. Developing a strong USP requires thoughtful internal discussion and a keen understanding of competitors. A certain amount of “competitive intelligence gathering” may be necessary. Once defined, your USP should guide not only sales conversations but also marketing, customer service and operational decisions. You can measure its impact through metrics, such as conversion rates and sales cycle length. Contact us for help evaluating the financial impact of your USP and measuring its effectiveness.
Changes to charitable donation deductions are on the horizon
Changes to charitable donation deductions are on the horizon. Beginning in 2026, if you itemize deductions, your otherwise allowable charitable deductions will be limited to the amount that exceeds 0.5% of your 2026 adjusted gross income. In addition, if you’ll be in the 37% income tax bracket, your tax benefit generally will be as if you were in the 35% bracket. If you’ll be affected, you may want to accelerate donations into 2025 and then bunch donations into alternating years. But if you claim the standard deduction, in 2026 you can potentially benefit from a new charitable deduction for nonitemizers of up to $1,000 ($2,000 for married couples filing jointly). Contact us to learn more.
Significant changes to information reporting go into effect for the 2026 tax year
If your business has employees or independent contractors, you’re subject to various information reporting requirements. Some significant changes to these rules will go into effect for the 2026 tax year (forms that will be filed in early 2027 to report 2026 amounts). Specifically, new reporting will be required to help employees and others claim tax deductions for qualified tips income and qualified overtime income. But there also will be some reporting relief for businesses. Effective for payments made after 2025, the reporting threshold for filing Form 1099-MISC and Form 1099-NEC will increase to $2,000 (from $600 for 2025), with inflation adjustments for payments made after 2026.
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