Understanding and controlling the unemployment tax costs of your business

| Business Briefs, Tax Briefs

As an employer, you must pay federal unemployment (FUTA) tax on amounts up to $7,000 paid to each employee as wages during the calendar year. The rate of tax imposed is 6% but can be reduced by a credit (described below). Most employers end up paying an effective FUTA tax rate of 0.6%. An employer taxed at a 6% rate would pay FUTA tax of $420 for each employee who earned at least $7,000 per year, while an employer taxed at 0.6% pays $42. Tax credit Unlike FICA taxes, only employers — and Read more [...]

Family businesses need succession plans, too

| Business Briefs, Business Miscellaneous

Those who run family-owned businesses often underestimate the need for a succession plan. After all, they say, we’re a family business — there will always be a family member here to keep the company going and no one will stand in the way. Not necessarily. In one all-too-common scenario, two of the owner’s children inherit the business and, while one wants to keep the business in the family, the other is eager to sell. Such conflicts can erupt into open combat between heirs and even destroy Read more [...]

Estimates vs. actuals: Was your 2018 budget reasonable?

| Business Briefs

As the year winds down, business owners can be thankful for the gift of perspective (among other things, we hope). Assuming you created a budget for the calendar year, you should now be able to accurately assess that budget by comparing its estimates to actual results. Your objective is to determine whether your budget was reasonable, and, if not, how to adjust it to be more accurate for 2019. Identify notable changes Your estimates, like those of many companies, probably start with historical Read more [...]

Dig out your business plan to prepare for the year ahead

| Business Briefs

Like many business owners, you probably created a business plan when you launched your company. But, as is also often the case, you may not have looked at it much since then. Now that fall has arrived and year end is coming soon, why not dig it out? Reviewing and revising a business plan can be a great way to plan for the year ahead. 6 sections to scrutinize Comprehensive business plans traditionally are composed of six sections. When revisiting yours, look for insights in each one: Executive Read more [...]

HSA + HDHP can be a winning health benefits formula

| Business Briefs

If you’ve done any research into employee benefits for your business recently, you may have come across a bit of alphabet soup in the form of “HSA + HDHP.” Although perhaps initially confusing, this formula represents an increasingly popular model for health care benefits — that is, offering a Health Savings Account (HSA) coupled with, as required by law, a high-deductible health plan (HDHP). Requirements An HSA operates somewhat like a Flexible Spending Account (FSA), which employers Read more [...]

Choosing the right accounting method for tax purposes

| Business Briefs, Tax Briefs

The Tax Cuts and Jobs Act (TCJA) liberalized the eligibility rules for using the cash method of accounting, making this method — which is simpler than the accrual method — available to more businesses. Now the IRS has provided procedures a small business taxpayer can use to obtain automatic consent to change its method of accounting under the TCJA. If you have the option to use either accounting method, it pays to consider whether switching methods would be beneficial. Cash vs. accrual Generally, Read more [...]

A midyear review should go beyond financials

| Business Briefs

Every year is a journey for a business. You begin with a set of objectives for the months ahead, probably encounter a few bumps along the way and, hopefully, reach your destination with some success and a few lessons learned. The middle of the year is the perfect time to stop for a breather. A midyear review can help you and your management team determine which objectives are still “meetable” and which ones may need tweaking or perhaps even elimination. Naturally, this will involve looking Read more [...]