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.
How what you donate impacts your tax deductions
Have you made contributions to charity this year? Are you considering making more? If so, it’s important to be familiar with the tax rules so you can maximize your tax benefit — or at least avoid finding out at tax filing time that your charitable deductions are smaller than you expected.
What you donate affects how much you can deduct and the limits that apply. For example, cash donations are generally deductible up to 60% of adjusted gross income (AGI) while property donation deductions are typically limited to 30% or 50% of AGI. And nonitemizers can deduct only cash gifts, subject to a $1,000 limit ($2,000 if married filing jointly).
Many additional rules apply. Contact us with questions.
The new-and-improved credit for employer-provided child care
New tax rules may significantly reduce the cost of providing child care to your employees. Starting in 2026, the employer-provided child care credit generally equals 40% of qualified facility expenses (up from 25%), plus 10% of qualified resource and referral costs, up to $500,000 (up from $150,000). Small businesses may qualify for a 50% rate on qualified facility expenses and a $600,000 limit.
The credit may apply to operating your own facility, contracting with a qualified provider or participating in a jointly operated arrangement. But eligibility, additional limits and recapture rules require careful review.
Contact us for help evaluating your options and projecting the credit’s value.
Selecting a tax accounting method for your small business
Certain “small” businesses have a choice of using cash or accrual accounting for tax purposes. If you’re one of them, which route should you take?
Cash-basis businesses recognize income when received and deduct expenses when paid, providing greater flexibility in the timing of income and deductions. In contrast, accrual-basis businesses recognize income when earned and deduct expenses when incurred, regardless of the timing of cash receipts or payments.
Even if you meet the eligibility requirements, the cash method isn’t right for every business. And switching methods adds administrative costs. Contact us to learn more about each option.
Midyear tax planning: Review opportunities to save taxes this year (or next)
Summer is a good time to see whether your income, deductions and investment activity are lining up as expected. Reviewing your tax picture now gives you more time to take steps to reduce or defer taxes. For example, if you expect this year’s income to be near the threshold for a higher bracket, consider strategies for reducing your taxable income to stay out of that bracket. If you’ve realized, or expect to realize, significant capital gains this year, consider selling some depreciated investments to generate losses you can use to offset those gains. And if you’d like help evaluating these and other midyear tax strategies, contact us.
Stress testing: A smart way to manage today’s business risks
There’s no shortage of uncertainty for today’s business owners. It’s impossible to predict every disruption, but stress testing can help you identify vulnerabilities before they become costly problems. This approach requires you to identify key risks, evaluate realistic scenarios with your leadership team and advisors, and develop plans to strengthen resilience, such as disaster recovery or succession planning. To stay responsive, review and update your stress tests annually based on changes to your business, industry or the broader marketplace. Contact us. We can help you strengthen your risk management strategy.
FAQs about resolving small business tax issues
IRS or state tax problems don’t have to derail your business. Many issues can be resolved when they’re addressed promptly and strategically.
If you or your business receives a tax notice from the IRS or a state agency, don’t ignore it. Be mindful of the notice’s deadline and work with your tax advisor to prepare supporting documentation and an appropriate response. If you owe back taxes that you can’t pay in full, explore potential relief options, such as a temporary delay in collection due to hardship, an installment agreement or payment plan, or a settlement plan.
We can help you communicate with tax authorities and create a plan to get your business back on track. Contact us to learn more.