Self-employed? Don’t overlook valuable tax deductions
Self-employed individuals often miss legitimate tax savings because they fail to keep adequate records or misunderstand the rules. Don’t let this happen to you.
Follow this golden rule: Business expenses must be ordinary (common in your industry) and necessary (helpful and appropriate for the business). Of course, you can deduct supplies, materials, and employee payroll and benefits. But don’t overlook other deductible costs — such as for your home office, education, business meals and travel, and business vehicles.
We can help you identify qualifying business expense deductions and establish recordkeeping practices that support them. Contact us to learn more.
Summer’s for vacation — encourage your workers to take one
Summer often means vacation time. But if your employees don’t take accrued paid time off (PTO), it can be a problem. Depending on your policies and state laws, workers may lose unused PTO hours at year end. Harms to your business can include lower productivity and greater fraud risk. Encourage workers to use their PTO with a formal policy and regular reminders from supervisors. If you offer a 401(k) plan, consider a PTO contribution program. These programs allow employees to convert unused vacation hours to 401(k) plan contributions. Contact us for help evaluating your PTO policies and developing strategies to keep unused PTO from becoming a liability.
Beware of potential tax issues when selling self-created intangibles
Complex federal income tax rules apply to self-created intangible assets. Sales of self-created intangibles that qualify as capital assets — such as goodwill and customer lists — generate capital gains or losses (with gains typically taxed at 15% or 20%).
However, sales of noncapital self-created intangibles — such as certain patents and copyrights — may be subject to ordinary income tax rates, which can be as high as 37%. In short, the type of asset, who created it and who owns it can matter.
If you’re planning to sell or transfer intangible assets, we can help you understand the federal tax implications before your deal is finalized. Contact us to learn more.
Looking for funding? Consider SBA loans
It can be tough for small businesses to borrow money at favorable terms. But the U.S. Small Business Administration (SBA) offers several loan programs to help small businesses grow and create jobs. SBA loans of up to $5.5 million may be available and typically offer competitive interest rates and terms. Applying and qualifying for an SBA loan may also be easier than for conventional loans. The most popular type is the 7(a) loan, which can be used for most business purposes, including asset purchases and debt refinancing. The microloan program offers loans of up to $50,000. Contact us to help determine the right option for your business.
Protect yourself from fraudsters impersonating the IRS and other tax scams
Scammers continue to target taxpayers through email, text messages, phone calls and regular mail. They often try to create urgency or fear to trick victims into sharing sensitive information or sending money.
Remember, the IRS will never contact you by email or text about a tax bill or refund. It also won’t demand immediate payment over the phone. Most IRS communications are sent through regular mail — though fraudsters may send fake IRS notices by mail, often including QR codes.
Don’t click on links, open attachments or scan QR codes from unknown senders that might direct you to fraudulent websites designed to steal personal or financial information. Contact us if you have questions.
Self-employed? Don’t overlook a Roth IRA
Small business owners: If you think your income is too high for you to qualify to make Roth IRA contributions, think again. Many owners are eligible without realizing it because of various deductions for the self-employed.
A Roth IRA offers potential advantages over tax-deferred accounts. Although Roth contributions aren’t deductible, qualified withdrawals won’t be taxed. And you aren’t required to take withdrawals from your Roth IRA, meaning the account can continue to grow tax-free. Your heirs can also take tax-free withdrawals.
For help evaluating your Roth IRA eligibility and developing a long-term retirement strategy that aligns with your personal and financial goals, contact us.
What you can do to protect your business from rising costs
For the 12 months ending in April 2026, the U.S. inflation rate was 3.8%. Rising inflation can make managing a business challenging, yet you can still thrive by making prudent cost cuts and acting if opportunities arise. You might, for example, reduce expenses by switching vendors, cutting overtime hours or moving offices. Be sure to assess inflation’s effect on each product line and determine whether your product mix still makes sense. Then decide whether you should raise prices (just be sure to give customers fair notice). For help evaluating your current financial situation and developing additional inflation-fighting strategies, contact us.
Consider your potential charitable deduction before donating artwork
If you donate artwork to charity, the deduction you can claim depends on several factors, including the type of organization receiving the piece and how it will be used. Your deduction will generally be reduced if the charity’s use of the artwork is unrelated to the purpose or function that’s the basis for its qualification as a tax-exempt organization. The reduction equals the amount of capital gain you would have realized had you sold the artwork instead of giving it to charity. Other deduction limits as well as special substantiation and appraisal rules also may apply. If you’re considering donating artwork or other valuable property, contact us for help ensuring the best tax outcome.
What’s a “small business,” and why does it matter?
Certain “small businesses” may qualify for several valuable tax breaks. But different tax provisions use different size tests.
For instance, a gross receipts test is used to determine eligibility for cash accounting, simplified inventory rules, the completed contract method, relief from UNICAP requirements and exemption from the business interest deduction limitation. This threshold is adjusted for inflation. For 2026, your business may be eligible if its average annual gross receipts for the prior three-year period were $32 million or less.
Contact us to help evaluate your eligibility for these and other tax-saving opportunities based on your business’s structure and operations.
Moving to a new state? Review the tax implications first
If you’re thinking about relocating, don’t choose a new state based only on climate, cost of living or proximity to family. Also review the tax implications.
For example, some states don’t have a personal income tax, and some that do have one offer tax breaks for pension payments, retirement plan distributions and Social Security payments. Also be aware that a state with no personal income tax may impose high property, sales or estate taxes.
Before making a move, contact us to review the potential income, property, sales and estate tax implications. We can help you minimize potential negative tax consequences and make the most of any tax advantages offered by the new state.