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How to Maximize Your Business Meal Tax Deductions

By |2025-03-12T16:07:08-07:00March 12, 2025|Categories: Business Advice|Tags: |0 Comments

When it comes to business-related tax deductions, one of the most confusing areas is whether business owners can deduct the cost of their own meals on their next tax filing. Only questions about auto expenses are more frequent, and we covered that issue in our last post (Maximizing Your Business Auto Deductions).

But with meal tax deductions, we’ve been asked about it so often that we’re starting to wonder if people are running businesses or just looking for a way to expense their sushi habit!

Business meal expense graphic

In most cases, the U.S. Federal Tax Code allows businesses (including small businesses and the self-employed) to deduct 50 percent of the cost of meals directly related to business activities. These include meals with clients, business partners, and so on for business-related purposes.

However, in some cases, businesses are allowed to deduct 100 percent of the cost of a business meal and beverages. If you’re not taking advantage of these exceptions to the rule, you’re just leaving money on the restaurant table.

In this post, we review the basic rules and then highlight the notable exceptions that can save you money.

IRS Rules for Deducting Meal and Entertainment Expenses

Generally, the following rules apply to tax deductions for business meals and entertainment: Continue reading… Continue reading… Continue reading…

Complying with California’s CalSavers Mandate

By |2025-01-30T14:57:47-08:00January 30, 2025|Categories: Business Advice|Tags: , |2 Comments

If you are a small-business owner in California, you already have a lot on your plate. From managing employees to tracking expenses and keeping up on your federal, state, and local estimated tax payments, the last thing you need is another complex regulation.

The good news is this: If you have at least one employee, other than yourself or your spouse, California’s CalSavers mandate is a regulation you can’t afford to overlook. This state-run retirement savings program is designed to help your employees save for their future without imposing an extra financial burden on you or your business. But, as you’re already well aware, compliance alone can be a burden.

In this post, we try to ease that burden by bringing you up to speed on CalSavers and guiding you through the steps to achieve compliance. Whether you’re new to the program or simply need a refresher, we have you covered!

California CalSavers Graphic

CalSavers Fundamentals

CalSavers is a retirement savings plan for workers whose employers don’t offer a workplace retirement plan, and for self-employed individuals and others who want to save extra toward retirement. Employees contribute to a Roth IRA (individual retirement account) that belongs to them but is administered by the state.

Designed to be easy for employers and simple for employees, CalSavers is professionally managed by private sector financial firms with oversight from a public board, chaired by the State Treasurer. There are no fees for employers, and employees manage their accounts directly with CalSavers.

Determining Whether the Mandate Applies to You

Initially, the CalSavers mandate applied only to employers with five or more California W-2 employees who did not offer retirement plans to their employees. Beginning in 2025, the threshold dropped to employers with Continue reading… Continue reading… Continue reading…

What You Need to Know About Reporting Beneficial Ownership Information

By |2024-05-01T15:00:33-07:00January 19, 2024|Categories: Business Advice|Tags: , |0 Comments

In 2021, the United States Congress passed the Corporate Transparency Act — a measure that creates a new beneficial ownership information reporting requirement. This requirement is part of the U.S. government’s efforts to make it harder for criminals, terrorists, and other bad actors to hide or benefit from their ill-gotten gains through shell companies or other opaque ownership structures.

Beneficial Ownership Information Graphic

Starting Jan. 1, 2024, many companies will be required to report information to the U.S. government — specifically to the Financial Crimes Enforcement Network (FinCEN) — about who owns and controls them directly or indirectly. FinCEN begins accepting beneficial ownership information (BOI) reports on Monday, Jan. 1, 2024, electronically through a secure filing system accessed through its website at www.fincen.gov/boi. However, the actual deadline for filing is based on the date of your company’s creation or registration to do business.

For example:

  • A reporting company created or registered to do business before Jan. 1, 2024, has until Wednesday, Jan. 1, 2025, to file its initial beneficial ownership information report. (A reporting company is a business entity that’s required to report its beneficial ownership information; not all companies are required to do so. See the next section to determine whether your company is required to report its beneficial ownership information or not.)
  • A reporting company established or registered between Jan. 1, 2024, and Jan. 1, 2025, must file its initial beneficial ownership information report within 90 calendar days after receiving notice of its creation or registration. This deadline of 90 calendar days commences upon the company’s receipt of official notice confirming its effective creation or registration, or following the initial public notice of the company’s creation or registration by a secretary of state or similar office, whichever occurs first.
  • Companies subject to reporting, established or registered on or after Wednesday, Jan. 1, 2025, must submit their initial BOI (Beneficial Ownership Information) reports to FinCEN within 30 calendar days from the official confirmation or public announcement validating the effectiveness of the company’s creation or registration.

In this post, we bring you up to speed on what you need to know to comply with the requirement to report beneficial ownership information for any reporting companies you own or control; for example, if you operate your small business as an S-Corp or LLC. (Please note: The content of this blog post is not intended to serve as legal or financial advice. For more information, please refer to the Disclaimer at the end of this post.)

Warning! If you receive any correspondence claiming to be from a government agency instructing you to click a link or website address or scan a QR code to provide information about your company, disregard it. Such letters or email messages are fraudulent. Do not respond to them or click on any links or scan any QR codes they may contain. The Financial Crimes Enforcement Network (FinCEN) does not send unsolicited requests.

Determining Whether Your Company Is Required to Report Its Beneficial Ownership Information

There are two types of reporting companies (companies required to report beneficial ownership information): Continue reading… Continue reading… Continue reading…

The Basics of Finding New Sources of Business: Part 2

By |2022-05-04T15:45:41-07:00May 4, 2022|Categories: Business Advice|Tags: , , , , |0 Comments

Welcome to the second part of our two-part series, “The Basics of Finding New Sources of Business.” In Part 1 of this series, we explored various ways to grow your business, including increasing customer spend, diversifying, and increasing market share.

In this part, we seek to inspire more ideas for driving growth through disruptive innovation, alliances, and partnerships. Then we wrap up this series by taking a quick look at how to analyze your company’s strengths so you can leverage them to grow in the right direction.

The Basics of Finding New Sources of Business

As we explained in Part 1, growth is essential not only for a business to succeed but, more important, for its very survival. As the old saying goes, “If you’re not growing, you’re dying,” and that’s especially true for small businesses. If you’re not actively pursuing customers, a competitor will be chipping away at your consumer base until the entire foundation of your business crumbles. This series might inspire you, but only you can do the difficult and creative work to make growth happen.

Growth Through Disruptive Innovation

One great way to quickly grow a business is through disruptive innovation — introducing a new product or service to a market that makes traditionally successful products or services in that market obsolete.

Two familiar examples of disruptive innovation

Here are a couple examples of disruptive innovation that you’ll probably recognize:

  • The first digital cameras were low on functionality and didn’t match the quality of traditional film cameras. The leading camera manufacturers, including Kodak, continued to manufacture and market cameras that used film. This of course left a massive opening for smaller consumer electronics manufacturers to nearly supplant their larger and more entrenched counterparts. Since then, smartphones have made traditional digital cameras nearly obsolete.
  • In its early days, Amazon.com disrupted traditional bookstores, using the Internet and traditional delivery services to make it far more convenient and less expensive to purchase books. It has continued to disrupt the publishing industry with its Kindle reader and self-publishing services, making it possible for authors to publish and sell directly to readers.

Principles of disruptive innovation

Several factors make disruptive innovation possible. By understanding these factors, you have a better chance of identifying the soft underbelly of large companies and taking advantage of their susceptibilities: Continue reading… Continue reading… Continue reading…

The Basics of Finding New Sources of Business: Part 1

By |2022-04-28T17:18:04-07:00April 28, 2022|Categories: Business Advice|Tags: |0 Comments

Frequent readers of our blog may recall that in How to Grow Your Business: 4 Surefire Methods, we suggested that the primary causes of business failure are often related to cash flow (more cash flowing out than flowing in), poor money management, slow or non- existent growth, and a decline in sales and revenue.

Business growth, as it turns out, is the heartbeat of success. The more business you conduct, the more revenue you generate. The more customers or clients you have, the less likely your business will fail if you happen to lose a few. The broader your market, the less susceptible your business is to market changes. And the happier your customers are, the more your business is worth when you decide to sell.

As a business owner, you want to be constantly finding or creating new sources of business. But how?

In Part 1 of this series, we dive deep into the basics of growth and explore how to grow your business by increasing customer spend, diversifying, and increasing market share. In Part 2, which we’ll publish next week, we introduce a few more ways to grow your business — including through disruptive innovation and by pursuing alliances and partnership opportunities. Finally, we look at how to analyze your business’s strengths so you can leverage and build on them to grow.

So, let’s get started.

Business Growth Basics

Business growth is about expanding your business in some way — increasing revenue or profitability, your customer base, your market share, your physical size or geographic coverage, your executive and/or support staff, or some other aspect of your business.

To understand business growth basics, you just need to know Continue reading… Continue reading… Continue reading…

Obtaining The Best Valuation of Your Business

By |2022-04-11T12:22:14-07:00April 11, 2022|Categories: Business Advice|Tags: |0 Comments

Do you have any idea how much your business is worth? If not, we can guide you through the process of securing an accurate business valuation.

A business valuation is just that: an analysis of how much money a business entity is worth. Knowing the fair value of a business is useful for many reasons, including selling or buying a business, establishing partner ownership, securing business loans, calculating taxes on gifted shares, and in the context of succession and estate planning or divorce proceedings.

Here at SWC, where we help entrepreneurs and business owners maximize their return on investment while achieving both their professional and personal goals, we encourage you to get up to speed on the basics of business valuation, which we cover in this post:

  • Why you should have a current valuation of your business
  • Some common methods of valuing a business
  • How to prepare so as to get the best valuation
  • Some advice for improving business valuation prior to a sale or merger
  • Next steps you can take with us to get a valuation done for your business

Why You Need a Business Valuation

Business valuations are not exclusively for large corporations. Even small and midsize business (SMB) owners can benefit from knowing the value of their business. For example, a business valuation:

  • Reduces the likelihood of costly tax audits and penalties on your estate
  • Improves the odds of being approved for a business loan, assuming the valuation supports the business’s credit worthiness
  • Reveals the true value of stock/shares
  • Simplifies calculations during partner buyouts
  • Save heirs from extreme tax liabilities

Not every business needs a valuation. If you are self-employed (meaning, you are the business) and not planning to ever sell your business, pass it down to heirs, or borrow against it, you probably won’t benefit from undertaking a business valuation. (However, that may open the door to the more pressing discussion of why you are not building a business that you can eventually sell or pass down to your heirs.)

Here is a more detailed list of common reasons to get a business valuation: Continue reading… Continue reading… Continue reading…

Freelancers and Contractors Accepting PayPal, Venmo, and Crypto — What You Need to Know

By |2022-01-25T16:18:08-08:00January 25, 2022|Categories: Business Advice, Independent Contractor|Tags: , , , |0 Comments

We all accept the fact that each new year ushers in new or updated tax rules, regulations, deadlines, rates, and thresholds. However, changes for 2022 are most remarkable because of their impact on freelancers, independent contractors, and any business that accepts payment via an e-payment platform such as PayPal or Venmo.

Top among these changes affecting many of the above-mentioned freelancers, independent contractors, or businesses is the use of hard, soft, cold, hot, mobile, or digital wallets to accept payments available through cryptocurrencies, which are now perhaps stable enough for businesses to consider accepting.

Crypto and the IRS graphic

In this post, we give you a heads up on what to expect in 2022 so you won’t be blindsided at any point during the year ahead. Below, we offer insights into each of the following changes for 2022:

  • New reporting rules for payment apps
  • What you need to know about accepting cryptocurrencies
  • Upcoming tax deadlines
  • Changes to the standard deduction
  • Marginal tax rates for 2022
  • Increase in the earned income tax credit

To avoid any unpleasant surprises at year’s end, now is the time to get up to speed on the key changes below and adjust your tax and financial planning accordingly.

New Reporting Rules for Payment Apps

To reduce the amount of unreported taxable income flowing through e-payment platforms such as PayPal, Venmo, and Cash App, the Internal Revenue Service (IRS) is requiring such platforms to report each user’s business transactions if they exceed $600 for the year for goods or services.

The prior threshold for reporting was 200 transactions per year or a combined total of at least Continue reading… Continue reading… Continue reading…

The Business Benefit to Helping Your Employees Pay Off Their Student Loans

By |2021-10-11T13:10:39-07:00October 11, 2021|Categories: Business Advice|Tags: , , |0 Comments

Thanks to the Coronavirus Aid, Relief, and Economic Security (CARES) Act, signed into law on March 21, 2020, employers have a valuable new benefit they can offer to their employees — tax-free employer student loan assistance. And as you’ll see below, this benevolent act has tax advantages for your business.

According to the provision created by Section 2206 of the CARES Act, an employer can pay up to $5,250 in student loan payments for an employee each year, either to the student loan servicer or directly to the employee. Payments are tax-free for the employee, and the employer receives a payroll tax exclusion on that amount.

Originally intended to expire in 2020, the program has been extended through December 2025 under the Consolidated Appropriations Act (CAA), with those of us here at SWC believing it’s likely to be extended beyond 2025.

The Benefits of Helping Employees Pay Their Student Loans

As a business owner, you know that tax-free isn’t free. You pay for every benefit that you offer and that your employees take advantage of. The payroll tax exclusion slightly offsets the cost you incur, but employees benefit most in respect to the student loan relief and the fact that they don’t pay income tax on that compensation.

So, what’s in it for you? Consider the following potential benefits: Continue reading… Continue reading… Continue reading…

Making Sense of Employer-Sponsored Retirement Plan Options

By |2021-06-22T16:05:40-07:00June 22, 2021|Categories: Business Advice|Tags: , , , , , , , |0 Comments

Establishing a retirement plan for employees can pay off in big ways, and we’re not just talking about the benefits for employees. Small business owners stand to benefit as well.

Small business benefits include:

  • Retirement plans improve recruitment and retention of better employees. This is especially important now that COVID restrictions are being lifted, and employers are struggling to entice their best employees back into the office.
  • Employer contributions are tax-deductible.
  • Assets in the plan grow tax-free.
  • Plan options are flexible.
  • Tax credits and other tax relief can help offset costs.

Employee benefits include:

  • Employee contributions can reduce their taxable income, lowering their taxes.
  • Contributions and profits grow tax-free until they’re withdrawn.
  • Contributions can be automated through payroll deductions, making it easier to save for retirement.
  • Through compounding interest (earning interest on savings and interest), contributions grow faster over time.
  • Retirement accounts can be carried from one employer to another.
  • Some employees may be eligible for the saver’s credit — a federal income tax credit on top of the tax deduction already allowed for contributions to a retirement account.
  • Some plans let employees defer a portion of their compensation into the plan, which can help employees save money on taxes.
  • Employees have peace of mind knowing that they’re improving their financial security for their future and retirement.

Choosing the Right Retirement Plan to Offer Your Employees

After deciding to offer a plan, you face the challenge of choosing which plan delivers the most bang for the buck — for both you (the business owner) and your employees. Several options are available, which is great, but without knowing the differences, picking a plan can be so overwhelming that you put off the decision indefinitely.

With that in mind, in this post, we describe the most common retirement plan options — from simplest to most complex — and present the key characteristics of each. As a small business owner, you’ll want to adopt a plan that’s tailored specifically to Continue reading… Continue reading… Continue reading…

How to Grow Your Business: 4 Surefire Methods

By |2021-06-03T15:26:10-07:00June 3, 2021|Categories: Business Advice|Tags: , , , , , |0 Comments

Congratulations! You have built and launched a business. You’re a member of a very select group of individuals. According to the U.S. Bureau of Labor Statistics, of the approximate 209 million working-age people in the U.S., only about 10 percent are self-employed, which includes four percent who own their own business and have employees working for them.

If your business is more than a year old, you’ve crossed a major threshold — more than a fifth of new businesses close after their first year in operation. By the fifth year, the failure rate hits 50 percent.

The main cause of new business failures? Cash flow — more cash flowing out than flowing in. Some of that is due to poor money management, but part is also due to slow or non-existent growth, or even a decline in sales and revenue. Strong growth can drive success even when a business isn’t careful about spending.

The problem is that while entrepreneurs are often superstars when it comes to starting a business, they’re often lousy at managing and growing a business. They may not even be aware of the four ways to grow a business and increase its value.

The 4 Ways to Grow a Business

You can find all sorts of ways to grow a business, but they all boil down to the following four:

  1. Increase your number of good customers.
  2. Increase repeat sales.
  3. Increase average sales value.
  4. Make each business process more effective.

Yes, that’s it. Four ways to grow your business.

If you’re thinking we missed one — cutting costs — technically speaking, that won’t grow your business. Cutting costs increases profitability, but not revenue. It improves the value of your business only if you reinvest the savings toward growing your business in one of the four ways mentioned above. Instead, if you look at costs through the lens of making your business processes more effective, your focus will be to make sure that every dollar of cost becomes an investment. And investments, not costs, generate returns!

In this post, we bring you up to speed on these four fundamental ways to grow your business and introduce you to a few common approaches for each. We don’t go into detail because every business and business owner/manager is different. We can take a deeper dive and explore specific techniques when we meet with you personally to discuss your business.

Method 1: Increase Your Number of Good Customers

Customer acquisition is where most business owners initially focus on growth. It’s known as the “front end” of marketing because it’s about identifying and connecting directly with prospective customers.

While your business has many techniques available for winning new customers, here we focus on the five biggies: Continue reading… Continue reading… Continue reading…

© 2014- Stees, Walker & Company, LLP (SWC). All rights reserved.
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