Category Archives: Education

Education, IRS, Tips

IRS Side-By-Side Comparison For Businesses Of Tax Cuts & Jobs Act

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I found the recent IRS release on the new tax law — a side-by-side comparison for businesses showing “before-and-after” rules — to be well-written and clear, and it does a good job of highlighting the key changes in order of relative importance to most companies. As such, I’m reprinting the recent IRS newsletter to small businesses in its entirety below.

From the IRS e-News for Small Business, Issue #36:

The Tax Cuts and Jobs Act (TCJA) changed deductions, depreciation, expensing, tax credits and other tax items affecting businesses. This side-by-side comparison can help businesses understand the changes and plan accordingly.

Some provisions of the TCJA affecting individual taxpayers can also affect business taxes. Businesses and self-employed individuals should review tax reform changes for individuals and determine if and how these provisions may concern their business situation.

Visit IRS.gov/taxreform regularly for tax reform updates. Businesses can find details and the latest resources at Tax Reform Provisions that Affect Businesses.

Education, Tips

Vacation Time Is Key to a Better Business

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I’ve had the privilege to work with many wonderful clients through the years, among them, Honey Butter Fried Chicken and Sunday Dinner Club, both brainchildren of talented chefs Christine Cikowski and Josh Kulp.

Recently, Christine’s writing was featured in the James Beard Foundation’s op-ed series, where luminaries from the culinary world get a chance to share their unique perspectives. Here, she:

explores the structures and cultural assumptions of the industry that disincentivize taking time off, and why she and her co-owner Josh Kulp decided to make the benefit of paid leave a top priority.

These chef-owners have always made fair wages, benefits and PTO a priority in their business, but in this article, she lays out why this commitment has resulted in a return on investment (ROI) — not just an ethical responsibility. Christine breaks it down into three main areas:

1) What started simply as a pledge to take care of our people has gifted our small business back with big benefits. Staff are happier and healthier when they have the resources to care for themselves. They come to work with higher energy, and give better service. They stay with us longer, which yields less turnover.

2) We view this as a benefit not just to staff, but to the restaurant itself. It’s smart business for our team to experience what it is like when their co-workers are out: how to cover positions and how to run lean… Our team has embraced a culture that supports time off. We all pitch in and work a little more when people are out, because at some point it will be our turn.

3) It’s good business for [owners] to take time off, too. It allows me to rest and reset… all of which have made me a much better business partner, leader, and human. It’s beneficial for all of us: not just in terms of my own health as an owner… but for my staff as well. It gives them the opportunity to run the business, to troubleshoot and fix things. It allows them to grow into their roles and shine on their own. If we owners and chefs never take a day (or even an hour) off, our teams won’t gain these experiences.

Her closing paragraph sums it up perfectly, in my opinion, and echoes some of the key teachings of thought-leaders throughout the business world:

It takes a village to run a restaurant—so we let them run it. I don’t believe we are, nor should be, crucial to the daily survival of our kitchens and businesses. Especially if we want to be in business for five, 10, or 20-plus years. And if we want our amazing staff to stick around and come on that journey with us, we need to make sure they’re taken care of. We must provide them the means to take time off when they need to—so that they can be strong and healthy along the way.

Read the full article here: Why Vacation Time Is the Key to a Better Restaurant | James Beard Foundation

Education, Software, Tips

Small Business Credit & Financing Webinars

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The question of funding for small businesses comes up quite often, and I found myself yet again recommending Nav.com to a client recently. It’s been a while since I mentioned the two helpful webinars offered by them on CPAacademy.org — both archived so you can access them anytime:

Help Your Clients Build Strong Credit And Get Lender-Ready

  • Learn how strong business credit scores can help businesses grow.
  • Understand the process for building business credit.
  • Identify and avoid common ways business activity puts business owner’s personal credit at risk.
  • Help your small business clients become “lender-ready.”

Where’s The Money? Financing Sources For Your Small Business Clients

  • Understand the pros and cons as well as lender requirements for the main types of financing.
  • Learn about financing options for start-ups, business owners with poor personal credit, and other challenging situations.
  • Help your clients prepare for financing and avoid expensive pitfalls.
  • Get free tools you can use to help your clients evaluate costs and make better borrowing decisions.​

I have no particular allegiance to Nav over any of the other companies, such as FundBox, except that I’ve been very impressed with their mission and their commitment to client education, especially from Gerri Detweiler, the Head of Market Education. A quote from their website:

We launched Nav in 2012 to solve a major challenge faced by small business owners: finding affordable financing. There are more ways than ever to get business funding—over 44 options at last count—but it is still a complex and miserable experience. Business owners need a partner, not just a loan. As small business owners themselves, our founders, Levi King and Caton Hanson, experienced this challenge first hand. They believed small business owners deserved an easier, transparent way to manage their financial health and find the right financing.

The two webinars above do a great job of outlining how you can help your accounting, bookkeeping and finance clients become more credit-worthy and prepare for future borrowing. And Nav itself does a great job of helping them find the least expensive loan for their risk-level.

Some tips they mention in the webinars, for businesses wanting to establish credit: maintain under 30% credit utilization; have 5 or fewer credit inquiries in the past 6 months; and have at least $5k in personal credit limits.

I want to specifically mention the app “Nav Business Loan Reality Check App” — a great tool for small businesses to see the lender’s view of their creditworthiness. Another is the “Match Factor” tool, which I remember as impressive, along with these helpful links:

– Business Financing Options
https://www.nav.com/business-financing-options/

– Link to the Interest Rate Traps calculations feature from my website to help clients calculate the APR of business financing.
https://www.nav.com/business-loan-calculators/

For accountants, you can set up your own account, check your credit score, and even see if your business has its own credit score. You can also join their accountant advisor program and get free business credit reports to send to clients who are considering looking at borrowing options. I recommend signing up to receive their “Accounting Professional’s Guide to Business Credit” if the webinars leave you hungry for more.

And as always, none of this is sponsored material. I’m just a fan of the company because they’ve been helpful to my clients, and their webinars have been helpful in making me a better consultant.

Education, IRS

Upcoming NSAC Webinars Nov 6 & 27

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There are a couple upcoming NSAC webinars I really encourage you to consider taking!

Should I or Shouldn’t I – The Basics of Business Ethics for Co-op Personnel
https://nsacoop.org/webcast_details.php?id=238
Tuesday, November 06, 2018
11:00 AM EST / 10:00 AM CST / 09:00 AM MST / 08:00 AM PST

This session, presented by Steve Dawson of Dawson Forensics, focuses on business ethics: how do we determine between should and shouldn’t. This session focuses on the “why’s and how-to’s” regarding the establishment of a business ethics policy.

1099: Increased Reporting Pressure
https://nsacoop.org/webcast_details.php?id=244
Tuesday, November 27, 2018
02:00 PM EST / 01:00 PM CST / 12:00 PM MST / 11:00 AM PST

The IRS has been increasing its identification number matching for 1099 reporting. This has caused an increase in notices and penalties issued to taxpayers. In this session, Tara Guler and Jared Kempel, both of Baker Tilly, will discuss the new 1099 penalties, how to deal with a notice and steps that can be taken to obtain proper 1099 reporting information.

Please add https://nsacoop.org/cooperative_learning_network.php to your regular list of upcoming educational opportunities — no, they don’t pay me anything or even ask for me to post these. I just think they’re great.

Education, IRS

Biggest Tax Law Changes for Small Business Owners – Upcoming IRS Webinar

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I’d like to promote two important, related resources I came across recently:

CPA Practice Advisor released an article summarizing the biggest tax law changes for small business owners:

With just a few months left in the year, the IRS is highlighting important information for small businesses and self-employed individuals to help them understand and meet their tax obligations. Here are several changes that could affect the bottom line of many small businesses.

They outline a few key issues in particular:

  1. Qualified Business Income Deduction
  2. Temporary 100 percent expensing for certain business assets
  3. Fringe Benefits
  4. Estimated Taxes

Meanwhile, the IRS is trying to help educate taxpayers and their accountants on these topics. They are offering a free one-hour webinar on Thursday, November 1, 2018 (2 pm Central-time) called, “Tax Reform Basics for Small Businesses and Pass-Through Entities”. It will provide an overview of the following:

  1. Estimated Taxes
  2. New Rules for Depreciation
  3. Business Deductions
  4. Live Q & A session

If you run your own business or work with taxpayers who do, this resources are for you! Please do not wait until January to dip your toes into the whirling cesspool that is the new tax law. The regulations may only be in the proposed stage, but there’s no indication they’ll be finalized before year-end.

Education, QuickBooks Software, Tips

Income Statement (Profit & Loss) Template, Example and Guide

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A colleague recently shared this link on her facebook page — first, I was just curious — and then, I was actually pretty impressed. Most of the Income Statement (also known as a Profit & Loss) descriptions I’ve read have been entirely too technical, assuming not only a familiarity with accounting, but also an old-world understanding of manual ledger-keeping. As a result, I developed my own way through the years of explaining the Income Statement to clients.

I felt this description, provided (surprisingly) by Intuit, the company that produces QuickBooks, did a nice, succinct job of explaining the relationship between the three main financial statements: Income Statement, Balance Sheet, and Statement of Cash Flows. It also walks through a few examples of how real financial data is expressed on each of the reports, and then how the Income Statement itself is organized between Operating and Non-Operating income.

They offer a free template for all three statements for those using the DIY approach or want to familiarize themselves with the structure before starting their own business. A guide to financial reporting is among the many resources on the site.

Source: Free Income Statement (i.e. Profit and Loss Statement) Template, Example and Guide

Education, Illinois, IRS, Tips

City of Chicago Small Business Center on the Road Expo, Sept 8th

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The Small Business Center on the Road Expo series is back for 2018! The next expo will be at Truman College Saturday, September 8th from 10:00 a.m. – 2:00 p.m. The expos are free and open to the public.

Keynote Speaker will be Josh Deth, Chairman of the Party at Revolution Brewing in Chicago’s Logan Square neighborhood. Revolution Brewing operates two facilities, an award-winning brewpub and a production brewery growing by leaps and bounds. After landing his first brewery job cleaning kegs at age 20, Josh spent three years at Goose Island Beer Company before launching Revolution Brewing in 2010.

You can also expect:
– FREE assistance from business consultants to begin the licensing process
Resources on Procurement, Financial, Insurance, Consumer information
Financial Advisers on hand to answer questions
– Learn how to perfect your Elevator Pitch
– FREE Tax Clinic: One-on-One counseling sessions provided by Center for Economic Progress (CEP)
– FREE Law Clinic: Legal advice and support provided by The Community Law Project
– FREE Networking Hour: Connect and exchange ideas with like-minded entrepreneurs provided by Chicago’s Office of the City Treasurer from 1:00 – 2:00 p.m.

Source: City of Chicago :: City of Chicago’s Small Business Center on the Road

Education, IRS, POS - Point of Sale, QuickBooks Software, Site News, Software, Tips

My Three Top Accounting Tips

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I recently received the honor of being named one of the Top Accounting Influencers of 2018 by Fit Small Business. As part of the interview process, they asked me for a list of three “top accounting tips” — and they picked one for their article. I figured in announcing the award, I should share all of the tips I provided in a related post, so here you go!

1) Involving an accountant in your business should be one of the first steps a business-owner takes, well before taxes are due. (I’m not saying this just because I’m a CPA; I’m saying it because I see the results of this oversight regularly.) This doesn’t mean you can’t file your own taxes… but if you take the time to consult with an expert first, you’ll make way fewer mistakes when you do. A qualified accountant who specializes in your industry can help you with so many of the key issues that otherwise might come back to haunt you at tax-time — from entity choice to software selection to funding your business.

2) Selecting the right type of entity (sole proprietor, LLC, partnership, S-Corp, etc.) can make a huge difference in both liability and taxation issues. It’s important to understand the rules of the entity type you choose — for example, if you’re an S-Corp, pay yourself “reasonable compensation” via payroll; it’s the law. With the changes in the new tax law, this piece of the puzzle has become even more complex and more important.

3) Technology should play a role in every aspect of your business — accounting, tax and bookkeeping are no exception. Find a CPA who understands and embraces the ways in which tasks can be automated, with an eye toward improving efficiency, accuracy, and audit-proofing your company. The right technology stack can improve inventory and ordering, point of sale, collections, payroll, workflow, forecasting and cash-flow. Almost every system can be leveraged such that the books become a daily source of information for making real-time management decisions… not just a requirement for tax compliance.

Follow these three tips, and in my opinion — the rest will follow.

Source: Accounting Software Reviews You Can Trust: Top Accounting Influencers

Education, IRS, Tips

What Kids Should Know About Summer Jobs And Taxes

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Forbes contributor Kelly Phillips Erb always does a great job of taking a complex but important subject and breaking it down into easy-to-digest components. Today she’s back with an article on What Kids And Their Parents Should Know About Summer Jobs And Taxes.

Her basic points:

  1. You may not owe taxes, but you may still need to fill out tax forms.
  2. You may need to file and pay taxes even if you’re paid under the table.
  3. Don’t forget about state and local taxes.
  4. You may be able to claim job-related expenses.
  5. Consider using a tax professional.
  6. Save for a rainy day.

I see a lot of folks forgetting #1 and #4 (sometimes because they’re ignoring #2). Please take a moment to read the article and perhaps consult with a tax professional — if you meet with them in the off-season, they’ll probably be open to a short consultation/ training session, so that you’re armed to file these forms yourself come tax-time. A little investment now will get you a lot of savings (and compliance with tax agencies) in the future.

Education, Illinois, Tips

Starting a Food Business in Chicago

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Chicago folks who are interested in the licensing requirements needed when Starting a Food Business should consider attending the upcoming introductory course by The Hatchery, a small food business incubator.

Tickets are only $40 and the course is being held at the Industrial Council of Nearwest Chicago, 320 N Damen Ave. 1st Floor.

If you attend and find it valuable, please share in the comments below!