Wayfair revisited — It’s time to review your sales tax obligations
In a 2018 decision, the U.S. Supreme Court expanded the power of states to collect sales tax from remote sellers. Today, nearly every state with a sales tax has enacted a similar law. So if your company does business across state lines, it’s a good idea to reexamine your sales tax obligations. If you make online, telephone or mail-order sales in states where you lack a physical presence, it’s critical to find out whether those states have economic nexus laws and determine whether your activities are enough to trigger them. If you have nexus with a state, you must register and collect state and applicable local taxes on your taxable sales there. If you need assistance, contact us.
5 ways to strengthen your business for the new year
The end of one year and the beginning of the next is a great opportunity for reflection and planning. Now’s a good time to think about ways to strengthen your business for the new year. Here are five ideas: 1) Compare your 2019 financial performance to budget and determine what went right or wrong. 2) Create a multiyear capital budget to anticipate expensive purchases. 3) Assess the competition to identify major players and how you should respond. 4) Review your insurance coverage to ensure you’re adequately protected. 5) Analyze market trends to evaluate where things stand and where they’re headed. Contact us for help implementing savvy moves to make 2020 a strong year for your company.
Stretch your marketing dollars further with smart strategies
If your marketing budget is limited, there may be ways to stretch that money further. For example, you could engage in some competitive intelligence and research the marketing campaigns of larger companies. Sometimes their big-budget approaches can be distilled down to lower-cost alternatives. You might also get hyperlocal and engage more actively with your community, such as displaying signage on vehicles or contributing to a locally-focused social media page. Last, look carefully into guerilla marketing: putting your company’s brand in the public eye in an unconventional way. Examples include (legal) graffiti art and viral videos. Contact us for help assessing costs and feasibility.
Small Businesses: It may not be not too late to cut your 2019 taxes
Don’t let the holiday rush keep you from taking some important steps to reduce your 2019 tax liability. You still have time to execute a few strategies. For example, are you thinking about purchasing new or used heavy vehicles, heavy equipment, machinery or office equipment in the new year? Buy them and place them in service by December 31, and you can deduct 100% of the cost as bonus depreciation. Or you can put recurring expenses normally paid early in the year on your credit card before Jan. 1. That way, you can claim the deduction for 2019 even though you don’t pay the bill until 2020. Finally, before year-end, contribute to a SEP or 401(k) if you haven’t reached the contribution limit.
Do you have a side gig? Make sure you understand your tax obligations
The number of people engaged in the “gig” or sharing economy has grown in recent years. And there are tax consequences for the people who perform these jobs, such as providing car rides, renting spare rooms, delivering food and walking dogs. Generally, if you receive income from these gigs, it’s taxable. That’s true even if the income comes from a side job and if you don’t receive a 1099-MISC or 1099-K form reporting the money you made. You may need to make quarterly estimated tax payments because your income isn’t subject to withholding. Some or all of your business expenses may be deductible on your tax return, subject to the normal tax limitations and rules. Contact us to learn more.
Adopting a child? Bring home tax savings with your bundle of joy
If you’re adopting a child, or you adopted one this year, there may be significant tax benefits available to offset the expenses. For 2019, adoptive parents may be able to claim a nonrefundable credit against their federal tax for up to $14,080 of “qualified adoption expenses” for each adopted child. (This amount is increasing to $14,300 for 2020.) The credit allowable for 2019 is phased out for taxpayers with adjusted gross income (AGI) of $211,160 ($214,520 for 2020). It is eliminated when AGI reaches $251,160 for 2019 ($254,520 for 2020). We can help ensure that you meet all the requirements to get the full benefit of the tax savings available to adoptive parents.
3 last-minute tips that may help trim your tax bill
You may still have time to reduce your federal tax liability by taking certain steps. For example, contribute the maximum to your retirement plans by year end, including traditional IRAs and SEP plans. Another idea: If you make your Jan. 2020 payment this month, you can deduct the interest portion on your 2019 tax return (assuming you itemize deductions on your tax return). You can also “harvest” any investment losses by Dec. 31. If you have more losses than gains, you generally can apply up to $3,000 of the excess to reduce your ordinary income. Any remaining losses are carried forward to future tax years. Contact us if you want to discuss ways to minimize your 2019 tax liability.
What’s the right device policy for your company?
Device policies pertaining to smartphones and other technology tools are evolving. Loose “bring your own device” (BYOD) policies are giving way to stricter “choose your own device” (CYOD) or “corporate-owned, personally enabled” (COPE) policies. A CYOD policy lets employees buy a device for combined personal/work use from a company-approved list. Generally, the employee owns the device while the business owns the SIM card and any proprietary data. Under a COPE policy, the employer buys and owns the device, which is intended for business use. The cost is higher, but it comes with greater control. We can help you analyze the potential costs of a device policy and make the right choice.
2020 Q1 tax calendar: Key deadlines for businesses and other employers
Here are a few key tax-related deadlines for businesses during Q1 of 2020. JAN. 31: File 2019 Forms W-2 with the Social Security Administration and provide copies to employees. Also provide copies of 2019 Forms 1099-MISC to recipients and, if reporting nonemployee compensation in Box 7, file, too. FEB. 28: File 2019 Forms 1099-MISC if not required earlier and paper filing. MAR. 16: If a calendar-year partnership or S corp., file or extend your 2019 tax return. Contact us to learn more about filing requirements and ensure you’re meeting all applicable deadlines.
Look in the mirror and identify your company culture
People are paying more attention to company culture when deciding whether to buy from a business or involve themselves with it. Two University of Michigan professors developed the Organizational Culture Assessment Instrument, which defines four common business cultures: 1) Clan; a close, family-like culture typical to start-ups and small businesses, 2) Adhocracy; a dynamic, creative culture focused on innovation, 3) Market; a results-driven, competitive culture bent on domination, and 4) Hierarchy; a formal, structured culture that values process-following and stability. Which one are you? Bear in mind that most businesses exhibit a mixture of the four styles, with one type dominant.