If you’ve ever considered paying employees in cash under the table, resist the temptation. Not only do you and your workers risk penalties, but the practice may do significant financial damage to your business and could even result in criminal prosecution. Justifying the practice Employers may make financial justifications for paying cash wages. It lowers [...]
If your profits are falling compared to revenue and assets, your financial statements may provide insight into what’s happening and how to improve your performance. Watch for red flags As you sell more and invest in additional assets, profits should, in theory, increase by a proportionate amount. However, that’s not always the case. Ratios to [...]
Come tax time, owner-employees face a variety of distinctive tax planning challenges, depending on whether their business is structured as a partnership, limited liability company (LLC) or corporation. Whether you’re thinking about your 2016 filing or planning for 2017, it’s important to be aware of the challenges that apply to your particular situation. Partnerships and [...]
The Tax Cuts and Jobs Act (TCJA) provides a valuable new tax break to noncorporate owners of pass-through entities: a deduction for a portion of qualified business income (QBI). The deduction generally applies to income from sole proprietorships, partnerships, S corporations and, typically, limited liability companies (LLCs). It can equal as much as 20% of [...]
Identity theft isn’t just a consumer problem. Criminals steal the identities of businesses, too. In addition to filing fraudulent tax returns, criminals assume the identities of companies to apply for credit, impersonate authorized users and empty bank accounts. Here are five ways you can reduce the chance it will happen to your business. 1. Protect [...]
You’ve probably heard about the recent U.S. Supreme Court decision allowing state and local governments to impose sales taxes on more out-of-state online sales. The ruling in South Dakota v. Wayfair, Inc. is welcome news for brick-and-mortar retailers, who felt previous rulings gave an unfair advantage to their online competitors. And state and local governments [...]
Owners of closely held businesses sometimes need to advance their companies money to bridge a temporary downturn or provide extra cash flow for an expansion, a major expense or other purposes. Should you categorize those advances as bona fide debt, additional paid-in capital or something in between? Under U.S. Generally Accepted Accounting Principles (GAAP), the [...]
One of the things that make family businesses such appealing places to work is trust. Trust is also one of the things that make family businesses vulnerable to fraud. It only takes one lone wolf to damage or destroy an enterprise you and your family have spent years building. Accept the possibility One of the [...]
The bookkeeper is one of any company’s most trusted employees. Unfortunately, that trust isn’t always deserved. Bookkeepers — particularly those in small and midsize businesses — are ideally positioned to embezzle from their employers. Less means more When bookkeepers go bad, there are plenty of ways for them to steal without alerting owners to irregularities. [...]
