Getting into data analytics without breaking the bank
Data analytics is the science of collecting and analyzing sets of data. When done right, it can shed light on what could help or hinder a business in fulfilling its strategic objectives or improving its performance in a cost-efficient way. For example, data analytics could enable you to narrow down who your most potentially valuable customers are, or it could help you decide whether to obtain outside financing (and, if so, how much). But it’s hardly a simple process. You’ll need to identify your company’s informational needs, choose appropriate metrics and then carefully invest in the right software. Contact us for help deciding whether data analytics would likely pay off for you.
Tax-wise ways to save for college
If you’re a parent with college-bound children, you may want to save for future college costs. There may be tax-favored ways to save. For example, 529 plans allow you to make contributions to an account set up to meet a child’s education expenses. Contributions aren’t deductible and are treated as taxable gifts to the child. But they’re eligible for the $17,000 annual gift tax exclusion in 2023. A donor who contributes more than the annual exclusion limit for the year can elect to treat the gift as if it were spread out over a 5-year period. Distributions of earnings that aren’t used for qualified expenses are subject to income tax plus a 10% penalty. Other rules apply.
Employers should be wary of ERC claims that are too good to be true
The Employee Retention Credit (ERC) was a valuable tax credit that helped employers that kept workers on staff during the height of the COVID-19 pandemic. While the credit is no longer available, eligible employers that haven’t yet claimed it might still be able to do so by filing amended payroll returns for tax years 2020 and 2021. However, the IRS is warning employers to beware of third parties that may be advising them to claim the ERC when they don’t qualify. Some third-party “ERC mills” often charge large upfront fees or a fee that’s contingent on the amount of the refund. If you didn’t claim the ERC, and believe you’re eligible, contact us. We can advise you on how to proceed.
POLK & ASSOCIATES EXPANDS REACH AND STRENGTHENS TEAM WITH STRATEGIC MERGER
New merger bolsters expertise, experience and industry-specific knowledge in key core competencies Bingham Farms, MI – January 1, 2023 – Polk & Associates (POLK) announces today a strategic merger that bolsters our Niche Industry competencies. Founded in 1979 POLK specializes in providing highly personalized services to clients in the manufacturing, real estate, healthcare and supporting […]
Inbound vs. outbound: Balancing your company’s sales strategies
Most businesses must balance inbound sales, which originate when a customer or prospect contacts you, with outbound sales, which arise from members of your sales team reaching out to customers and prospects. Inbound sales call for a strong brand-based marketing strategy and a well-trained, patient sales staff. They’re generally less work but may be harder to close. Outbound sales are usually more labor-intensive. They’re also typically more expensive because of higher marketing/advertising costs, travel expenses and staff turnover. But outside sales are more targeted and can generate more revenue. As we head into the new year, now’s a good time to find the right balance. Contact us for help.
Unused PTO a problem? Consider a contribution arrangement
A new year has arrived. For many businesses, this means employees’ paid time off (PTO) arrangements have reset, with some workers leaving a few or many unused hours on the table. There are various ways to help workers better use their PTO, including regular reminders from supervisors and helpful information about wellness. But if you offer a 401(k) plan, consider a PTO contribution program. One of these allows employees with unused vacation hours to elect to convert them to retirement plan contributions. You’ll need to amend your 401(k) plan and still follow the plan document’s eligibility, vesting, rollover, distribution and loan terms. Additional rules may apply. Contact us for more info.
How to minimize the S corporation LIFO recapture tax
If you’re considering converting your C corporation to an S corporation, there may be tax implications if you’ve been using the last in, first out (LIFO) inventory method. That’s because of the LIFO recapture income that will be triggered by converting to S corp status. As you’re aware, your corporation has been reporting a lower amount of taxable income under LIFO than it would have under the first in, first out (FIFO) method. The reason: The inventory taken into account in calculating the cost of goods sold under LIFO reflects current costs, which are usually higher. We can meet to compute what the tax on recapture would be and to see what planning steps might be taken to minimize it.
Renting to a relative? Watch out for tax traps
If you rent a home you own to a relative, there may be tax consequences. Renting out a home you own may result in a tax loss for you even if the rental income is more than your operating costs. You’re entitled to a depreciation deduction for your cost of the home (except for the portion allocated to the land). But if your tenant is related to you, special rules and limits may apply. For this purpose, “related” means a spouse, child, grandchild, parent, grandparent or sibling. No limits apply if 1) you rent to a relative who uses it as a principal residence (not just as a second or vacation home) for the year, and 2) it’s rented at fair market rent (not discounted).
Look forward to next year by revisiting your business plan
A new calendar year is about to arrive. Whether you’ve done a lot of strategic planning or just a little, a good way to double-check your objectives is to revisit your business plan. Traditionally, a business plan comprises six sections: 1) Executive summary. 2) Business description. 3) Industry and marketing analysis. 4) Management team description. 5) Implementation plan. 6) Financials. An executive summary is usually the first thing people read, but it’s the last section you should write. Instead, begin with your financials. That is, your business plan’s financial projections should support your strategic goals. Cash flow projections are particularly important. Contact us for help.
The standard business mileage rate is going up in 2023
The optional standard mileage rate used to calculate the tax-deductible cost of operating an automobile for business will be going up in 2023. The IRS recently announced that the cents-per-mile rate for the business use of a car, van, pickup or panel truck will be 65.5 cents. In 2022, the rate for the second half of the year (July 1 – December 31) was 62.5 cents per mile, and for the first half of the year (January 1 – June 30), it was 58.5 cents per mile. The standard mileage rate is useful if you don’t want to keep track of actual vehicle-related expenses. But you still must record certain information, such as the mileage, date and destination for each trip.