The 2019 Tax Changes That Will Affect Your Business

If you’re a small-business owner, you’ve probably heard of the 2018 tax bill—also known as “Tax Cuts and Jobs Act.” This bill has not only changed individual taxes, but it’s also reformed corporate taxes in the U.S.—especially for small businesses.


Here’s what you need to know:

The new pass-through income deduction

Originally touted as the tax break that would provide relief for small business owners, a 20% deduction is included in the bill for what they call “pass-through” income. This encompasses any income you receive from pass-through entities, including sole proprietorships, LLCs, partnerships, and S-Corps. Other types of income that are included under this umbrella include estate income as well as any dividends you may receive from Real Estate Investment Trust, or REIT, stocks.

That said, there’s one restriction that you should know about: the Tax Cuts and Jobs Act places a cap on the maximum amount of income that any people who work in what they deem “professional services” businesses (think lawyers, doctors, or consultants) can earn if they want to utilize this deduction. This pass-through deduction for professional services business will take effect for the tax year of 2018; people with AGI greater than $157,500 (single filers) or $315,000 (married filing jointly) will be impacted.

Tax Deductions That Are Gone

Many long-standing tax deductions managed to survive the processes that brought the latest tax bill into being—  some with modifications, some in their original form. However, not every tax deduction made the cut, so to speak. After all, the sole purpose of the Tax Cuts and Jobs Act wasn’t to offer tax relief; lawmaker sought to make the U.S. tax code simpler. This simplification meant that some deductions that had been part of the landscape for some time are no longer valid.

Wondering which deductions are missing? Here are a few of the most significant tax breaks that were removed from the tax code:

  • Casualty and theft losses — Previously, you could deduct the value of stolen items if your home was burgled. As of 2018, this deduction is only valid for any losses that are the result of a federally declared disaster.
  • Moving expenses — In the old tax code, moving expenses were a deduction that was considered “above-the-line”– you could take them even if you didn’t itemize your taxes. This deduction was intended to counteract the expenses related to moving for employment. Today, this deduction is no longer permitted, unless you fall within the parameters of certain forms of active-duty military service.
  • The “miscellaneous deduction” category — At last— a part of the tax code that was truly simplified! Previously, this consisted of a lengthy list of the deductions Americans could utilize. This list was applicable to the extent that they exceeded 2% of AGI, and it included items such as tax preparation expenses, expenses related to employment, and many more. Effective for the 2018 tax year, taxpayers can no longer utilize these deductions. Any taxpayers who have depended on these deductions in years past might feel a pinch now that they’re no longer available.

Tips to Make Tax Time Easier for Your Business

From January 1 through April 15, it might feel like a wild sprint to get your tax return filed on time. It might be the way you’ve always handled the annual pain that is tax time, but that doesn’t mean that you can’t break the cycle. Here are a few tips that will help ease the impending sense of panic!

  • Think about taxes all year long. Small business owners should not treat income taxes as a once-a-year event. Rather, tax planning should be a year-round activity. Waiting until the last minute just complicates the tax preparation process, and it limits your money-saving options. If you want to truly simplify your tax return, take steps to ensure that you’re not left scrambling at the last minute.
  • Be aware of law changes. Even with the help of a skilled professional, a small business owner must keep up with news related to laws. Staying on top of tax law will help you ensure your tax professional is doing the best possible job, and it keeps you informed as a business owner. Read the business papers and keep up with Congress’ work on tax laws. For instance, the Tax Cuts and Jobs Act will have a not-insignificant impact on next year’s tax return— if you’re not aware of the changes this bill will bring to your tax plan, you could find yourself facing significant payments that could have been avoided with a little bit of planning.
  • Don’t make assumptions. Tax planning, to some extent, is a gamble. Never make business decisions assuming that particular tax breaks will pass, or that certain policies will be enacted. You don’t want to be caught short when your assumptions don’t become reality.

We’ve Got You Covered

These changes may be confusing. That’s not surprising— the tax code is extensive.  However, there’s good news; if you work with experienced professionals, you don’t need to worry too much about them. At Steiner Business Solutions, we apply our know-how and training to make sure that you’re adhering to the updated tax code. We will calculate the effect of these changes on your bank account. Ready to talk? Click here to contact us today.

3 Year End Tax Tips For Small Businesses

It’s that time of year again. Time to review the past year and identify strategies that worked and the ones that didn’t.. A time to start forecasting for the future, referring to actuals for reasonable budget estimates. A time to cash flow annual employee bonuses. Yes folks, it’s year end.

These are things most business owners are thinking about as December 31st or fiscal year end approaches. But one thing that’s often overlooked is what needs to be done to optimize the company’s position when it comes time to file the tax returns.

We’ve put together a list of three year end tax tips to help you get your financial house in order ahead of tax season. Let’s dive in!

Year End Tax Tip #1 Don’t Skip Meeting With Your Accountant

If you do nothing else, set up a meeting with your accountant to discuss tax strategies before year end.

Why? Because with a little forecasting and tax planning, you could save your company thousands of tax dollars (and penalty payments), and you can do some cash planning to avoid a crunch in Q1.

Tax Deductions

Your accountant is up to date on all the current tax laws, including ones that allow certain advantageous deductions of which you may not be aware.

Know what your options are if you’re planning to buy equipment in the next few months. It may make sense to purchase it before year end and take the depreciation, or it may make sense to wait until the new year.

You may want to run the numbers and reap certain  tax benefits under Section 179, which has a deduction limit of $1,000,000.

Deferred Income

If your company books run on an accrual or modified cash basis, talk to your accountant about whether it’s possible to defer income. Deferring income could be the key to maintaining a healthy cash flow as you head into the new year.

Payroll Taxes and Compliance

If you’ve been drawing down on cash assets to pay yourself throughout the year, you’ll need to run a year end payroll to reflect your income and to pay the appropriate employee and employer payroll taxes.

Waiting until after the deadline can cause headaches— and big bucks. Your accountant can help you gross up those draws and make state and federal payroll deposits on your behalf ahead of tax deadlines.

Plus, if you meet with your accountant in advance, you can cash plan to accommodate these upcoming expenses.

Bottom Line:

Don’t put off meeting with your accountant at year end. You’ll probably regret it when the taxman comes calling!

Year End Tax Tip #2 Get Your Books In Shape

You and your accountant can’t make realistic, accurate projections for tax planning if your books aren’t up to date. So add your books to that new year’s resolution to get in shape.

Reconcile Your Accounts

Make sure your cash, credit card and any line of credit accounts are reconciled through the most current month prior to your meeting date with your accountant. (That includes PayPal and any other balances that affect the financials.)

You can’t make accurate cash and tax projections if your cash or liability accounts are misstated on the financials. And you probably don’t want to stay up until dawn catching up on a year’s worth of data entry at the eleventh hour.

Shoeboxes Are For Shoes

You don’t want to show up to your accountant’s office with a shoebox full of a year’s worth of receipts and nothing recorded in the books.

Aside from reasons listed above, your accountant may not have the time or resources available to get that information entered before the deadline which may mean you’ll have to file for an extension. And you’ll want organized records for audit trail purposes.

Plus, it’s just not a good leverage of your resources to pay a highly skilled accounting professional to do the work of an accounts payable or receivable clerk.

Retained Earnings

Compare retained earnings from the prior year to make sure there are no changes to the ending balance.

If there’s a difference, it means you’ve made entries affecting prior year numbers, which have already been reported to state and federal agencies on your tax returns. Ask your accountant about how to correct this problem.

Bottom Line:

If you want accurate projections, get your books up to date!

Year End Tax Tip #3 Charitable Giving

It’s not just about tax deductions, of course, but giving to your favorite charity can in fact reduce your tax liability.

Plan Your Giving

Take time to give some thought to which charity or charities support a mission that’s important to you. Corporate giving should be intentional, not last-minute.

Do your due diligence to make sure the charity is reputable, and know before you donate whether or not contributions are tax deductible.

In Kind Donations

Donations don’t necessarily have to be in the form of cash.

Consider holding a year end food or clothing drive in the office and donate the items to a reputable charity, or donate an item to a charity’s silent auction.

Most in-kind contributions can be claimed as a deduction for the fair market value of the items donated.

Get Proper Documentation

Charities generally send out thank you letters to donors along with a record of the cash or in-kind donation. Follow up with them if you haven’t received one.

These letters should also contain the organization’s tax identification number, and confirm whether the donation is tax deductible..

Bottom Line:

Not only does charitable giving support a cause that’s important to you, it can provide a tax deduction and it lets the community know you’re a good corporate citizen.
Whether you need help with tax planning, tax preparation or business consulting services, we invite you to visit our website, or give our offices a call at (804.525.4259).

Steiner Business Solutions Opens New Office in Wilmington NC

Steiner Business Solutions has announced the opening of a new office location in beautiful Wilmington NC. This marks the company’s first venture outside of Virginia. The North Carolina location enables the company to expand its market reach into the small business community, where it provides valuable bookkeeping, accounting, tax preparation, and business consulting services.

For Steiner Business Solutions, this fits right in with the company’s motto, “Bridging the Gap,” shown in the stylized bridge in its logo. The company is constantly reaching out to new customers and new communities, helping small businesses grow.

Steiner Business Solutions started as a small business itself, and takes pride in helping other small businesses with planning, productivity, and success. From its home base in Richmond, VA, the company has expanded into surrounding areas, including its new site in Wilmington NC.

This is just one of several new acquisitions for Steiner Business Solutions. It acquired a Richmond-based bookkeeping and bill paying company last year, and is currently exploring other options that will allow continued expansion to serve more customers.

Dan Steiner, CEO of Steiner Business Solutions, expects the acquisition to go smoothly. Current customers shouldn’t notice any change in service because the company is well-prepared for the integration.

About Steiner Business Solutions

Steiner Business Solutions provides a full range of services to small businesses, including bookkeeping, business consulting, fractional CFO services, payroll, QuickBooks training, tax preparation and planning. The Steiner Business Solutions brand serves as a single one-stop shop for small business owners. Steiner Business Solutions is based in Richmond, VA and was founded in 2006. For more information, visit steinerbusinesssolutions.com.

Why Strategic Planning Is Important for Small Businesses Too

Whether you’re just starting out or looking ahead to how you’ll scale your growth over the next few years, having and managing a strategy for the future of your small business is important. Too often, small businesses can conceptualize the value of strategic planning but ultimately back away, thinking that the scope of that type of strategy is better intended for larger operations.

This couldn’t be further from the truth. Strategic planning is a business solution that can benefit operations of all sizes – from a small “mom and pop” local business to the largest corporation. We know that 70% of businesses that use a formal process for managing their strategy outperform those that don’t.

That last thing you want for your small business is to be on the wrong side of those numbers. Here is why strategic planning for small businesses is so important today.

Why Does Any Business Need Strategic Planning?

No business opens its doors with a plan to fail. Every business has their sights set on the future, and in order to make that future a reality, a plan that outlines goals and a strategy for achieving them is crucial. Without a plan, you’re just stumbling around in the dark, holding your breath and hoping you make it over the next hurdle. Strategic small business planning puts a system of procedures in place that will guide your business to meeting each of its goals and achieving measurable growth.

This type of planning looks different for each business. Some will strategize a rigid approach to short term goals, while another might plan for growth over a five-year period with room for flexibility to adjust to shifting business trends. Either way, strategic planning keeps businesses focused on the future, and prevents them from taking a hit from unexpected challenges along the way.

Key Points of Small Business Planning

Perhaps the biggest benefit from strategic planning for small business is that it provides a path of action to follow. Markets aren’t as predictable for smaller operations, and it’s easy to stray off course. An effective, comprehensive plan will include at least five basic elements.

  • Mission or Objective: What does your business do, what purpose does it serve and how will it enhance the lives of consumers now and into the future?
  • Business Goals: Where do you see your business in 2, 5 or 10 years? Small businesses are best served by focusing on the goals that will grow their operation in the next 2-5 years.
  • Strategy: A detailed strategy for meeting each of the outlined goals.
  • Implementation: Execution is where many small businesses fall short. Strategic planning includes an action plan that outlines strategy implementation step by step.
  • Monitoring: Things change. Consistent monitoring helps recognize strong and weak points, as well as identify when you need to adapt to market shifts.

Keeping It Simple

The idea of planning for the future can be overwhelming. There’s no reason to make the process more complicated than it needs to be. A simple, actionable plan is better than no plan at all. It’s also important to remember you don’t have to take on this challenge all on your own.

We offer solutions designed specifically for small, growing businesses just like yours. If you would like to know more about identifying and implementing a strategic, actionable plan for your future growth, contact Steiner Business Solutions today.

Steiner Business Solutions Voted RTD The Best, Local Accounting Firm 2018

Richmond, you have voted for the fourth year in a row, and the winners are in. After 312,310 votes, you have selected your favorites in 109 categories, from The Best Brunch to The Best Furniture Store to The Best Auto Repair.

The votes are in – Best Local Accounting Firm in Richmond goes to Steiner Business Solutions!

Our staff is thrilled to win this award from the RTD. We share this honor with all our clients, friends, family and business partners. We love all of you! We’re keeping our foot on the gas and making a difference in the small business community. #RTDTheBest

3 Important Tips for Hiring the Right Fractional CFO for Your Small Business

As your small business matures, so does its needs. While in the beginning you may have been able to handle all the functions of your business operations with a smaller, unspecialized staff, you’re quickly coming to the conclusion that what you’re currently working with is no longer meeting the needs of your growth driven operation.

One of the most important positions in your small business is that of a CFO. At the end of the day, it’s the CFO who makes sure you’re using financial strategies for growth and profitability. Running a small business without a CFO is doable, but it can be difficult. The responsibilities handled by a CFO are not ones that you want to overlook or delegate to the wrong person.

You might be thinking about bringing in a dedicated CFO, but the sticker shock of their salary is causing some hesitation, or maybe you’re wondering if you need someone in the position full time when your business is still relatively small. Hiring a fractional CFO is a solution to both these concerns, but choosing the right one is an important decision. Here are three things to consider before you decide.

Understand What an Outsourced CFO Does

The first thing to do is make sure you understand what a fractional, or outsourced, CFO does and what their role in your business will be. A fractional CFO is someone who performs financial officer responsibilities for your business, on a part time basis, commonly from a remote location with occasional onsite visits. They’re there to work with you and your management team, point you in the direction of financial success and take care of the practicalities that your current team doesn’t have the time or professional skill set to handle. Cash management, capital needs assessment, margin analysis, pricing, and forecasting are just a few areas of interest CFOs can help with.

Know What You’re Looking For

Don’t assume that because an outsourced CFO isn’t working in the office next to yours that chemistry isn’t important. You’re putting your financial future into this person’s hands and having a level of respect and trust in them is non-negotiable.

Don’t hesitate to ask any potential fractional CFO about their practices, and how they’ll approach the unique financial aspects of your business. You shouldn’t settle for a one-size-fits-all approach, but instead look for someone who can pinpoint how your business is different and be able to come to you with solutions that fit.

Know Where to Go

The financial health and future of your business is far too important to trust in the hands of just anyone. While some CFOs will work independently, you will often find the most experienced, highly-qualified candidates working alongside other professionals in a company that provide a range of business services. Your fractional CFO should also specialize in working with small business clients.

We’re dedicated to providing you with the expert CFO services your small business needs. The integrity of our team affects our reputation and yours, and there’s nothing that we’ll let tarnish that. Contact Steiner Business Solutions today to learn more about our expert CFO consulting services.

4 Crucially Important Things to Know Before Acquiring a New Company

For many businesses, the absolute fastest path to growth is to branch out and acquire another company. The process that takes place during an acquisition, whether it’s the company’s first or their tenth, is extremely influential in the long term, overall success of the agreement.

While an acquisition might cost more upfront than other growth strategies, the payoff is worth the risk – as long as you’re thoughtful during the acquisition process. Many businesses that are approaching the acquisition process for the first time understandably have questions. The process to acquire a company is complex, however, we can start by talking about the four most important things to know before you begin.

The Connection Between Acquisition and Brand Image

It’s easy to look at a potential acquisition and see dollar signs, but it’s more important to step back and assess how well the company you’re looking at is aligned with your brand image and core values. This is important for several reasons.

First, there is always an adjustment period with a new acquisition – always. This period can be extremely difficult to navigate if you’re devoting all your resources to aligning your core values and processes. Choosing a company that’s already aligned with your basic mission, values and operations will provide for an easier transition.

Secondly, merging or acquiring a business that’s a complete disconnect from your core brand gives the image that you’re off playing in left field with no real idea of what your business focus really is.

Due Diligence

Due diligence is a necessary part of the M&A process. While you’ll likely have help with the legal aspects of due diligence, you need to start doing your homework before you even consider contacting the appropriate players about an acquisition.

You should start by researching every bit of information about the company that’s available publicly, including seemingly benign elements such as blog posts and social media action. These are all pieces of the puzzle that will help you assess the brand’s validity.

Secondly, once you connect with them it’s important that you leave no stone unturned in researching their financial information, quality of their staff and their corporate culture.

Know the Costs

The main number that gets looked at when considering an acquisition is the negotiated upon price. However, it’s important to look well past that number and determine how the operating costs of the newly acquired company will impact your overall cash-flow.

For example, you need to have a solid understanding of their monthly operating expenses, payroll, overhead, and the anticipated costs associated with any training that may be required with the acquisition.

Assemble Your Team

One of the most important assets you have in the acquisition process is the team that will make your dream of growth a successful reality. You need professionals who are skilled in all aspects of the M&A process – including due diligence, business valuation, deal negotiation and much more. Make sure you have this team in place before you begin the process.

If you’d like to know more about how to acquire a company and set your own business on a successful growth trajectory, we’d like to speak with you. Contact Steiner Business Solutions today to learn more.

 

NOW Is the Best Time for Business Tax Planning to Save On Taxes

Alleviate anxiety and panic later on in the year and help your business’ bottom line by prepping for tax season early. The best way to save money on your taxes is to get started on them well ahead of time.

Plan Your Approach

Timely tax planning is the secret to success come April 15th. When it comes time to file your taxes, the first thing you need to do is get your records in order. This can be a herculean task if you haven’t organized paperwork since the last time you filed your taxes! The best thing to do is to establish a system that you can adhere to with a modest amount of effort the whole year through. It’s also important to know in advance some of the deductions you’ll be planning on taking.

One of the most illuminating examples is that of business-related expenses for your vehicle. If your personal vehicle doubles as your work vehicle, you can deduct business-related travel expenses. There are two ways you can file for this deduction.

Each year, the IRS puts out standard mileage rates—what it considers to be the cost of operating an automobile for business. In 2018, that rate is 54.5 cents for every mile of business travel driven. However, you have the option of calculating the actual cost of using your vehicle. Keeping careful track year-round will allow you to choose the method that results in the larger write-off.

Keep Careful Records

Income, expenses, receipts—it all has to be kept and sorted appropriately. This is the information you’ll need to reference when you file for deductions on your tax return. Without having everything in order, you’ll end up missing out on valuable savings on your tax return. It’s important to maximize your deductions no matter what, but in the early days of a small business, this methodical approach to small business accounting can be the difference between keeping the lights on and closing up shop. The travel example above is only one of many ways that a little record keeping can result in real savings for your business.

Get Timely Advice

Tax law is constantly changing. It’s a job in and of itself just to keep up. As a small business owner, there are already a lot of hats you’ve got to wear. Most small business owners don’t have the time to add another. For this reason, businesses often fail to avail themselves of beneficial tax provisions. And we’re not talking about little-known loopholes. There are tax provisions designed for the express purpose of aiding the growth and prosperity of small businesses. Learning about these after it’s too late to take advantage of them can certainly sting.

Seeking outside aid for business tax preparation may seem like an unnecessary expense, but if you do your research and enlist the aid of a company you can trust, it’s one of the best investments you can make. Here in Richmond, VA, Steiner Business Solutions is ready to help you get started now on planning your taxes. Give us a call today at 804.525.4259 and reap the rewards come tax time.

How Business Consultants Can Help You Scale and Grow Your Small Business

Every small business shares a desire to grow. However, keeping the lights on can often seem like an incredible challenge in and of itself. So how do you place your small business on a solid foundation, and chart a path to the next level? That’s where small business consulting comes into play. The right business consultants provide two key things: experience and perspective.

Bridging the Knowledge Gap

Where you are and where you want to be is often a matter of bridging the gap between what you know now and what you need to know. It can be costly to bring on employees with that knowledge and time-consuming to gain that knowledge on your own. But business consultants provide a cost-effective means of tapping into the knowledge you need.

True knowledge is gained through experience. When you hire a business consultant, you’re looking for someone who’s helped businesses like yours navigate the trials and challenges that lie ahead. This experience means they can help you avoid pitfalls and get where you’re going faster.

Seeing Things Differently

The right business consultant will tap into their experience to provide you with a new way of looking at things. When running a small business and managing all of the responsibility and stress involved, it can be hard to see the bigger picture. Fear, doubt, pressure, and ambition cause many small business owners to batter away at challenges over and over again, often taking the same approach each time. A business consultant can bring in new methods you haven’t tried yet, allowing you to deploy your resources in novel ways that have proven effective for others.

The Three Pillars of Small Business Consulting

Knowledge, experience, perspective—a qualified business consultant can bring all of these to your organization. But what exactly will they do for you?

Identify Problems

As a small business owner, you may be at the mercy of a problem you can’t identify. Let’s say, for example, that your sales have plateaued, or even decreased. Before you can strengthen your sales, you need to figure out what’s stalled them or hurt them in the first place. Is there a problem with the quality of what you’re selling? Has a new competitor entered the field? Perhaps you’ve made the effort to offer promotions or discounts, but with nothing to show for it. In this example, weaknesses in your marketing efforts are to blame. But by failing to identify these weaknesses, you mistakenly spent money on advertising a promotion that didn’t reach your potential customers.

Craft Solutions

You know the problem that’s plaguing your small business. You may have required the insight of a business consultant to get here, or you may have found your way here on your own. Regardless, now you know what you need to fix, but you’re unsure how to fix it. Let’s continue with our previous example, where the problem you’re facing is weak marketing. Trial and error can help you identify the root of the issue, but that process also takes time and money you may not have. In this case, an experienced business consultant could help to identify and analyze metrics you didn’t know to look at, and then provide a solution tailored to boost those metrics.

This is an essential component of effective business consulting: providing a process or method that your business can follow, something tangible that will help you get over the hurdle in front of you and on your way to bigger and better things.

Optimize Operations

Sometimes it’s not a matter of doing things differently, just doing them better. Maybe your ads are effective, but you’re spreading them too thin. You’re paying for radio ads, TV ads, and web advertising, when only web advertising is bringing in new customers. By focusing your efforts, a knowledgeable business consultant can help you do more with less.

Strategic Planning and Partnership

Investing in strategic planning for small business has helped countless businesses survive and thrive. Contact Steiner Business Solutions here in Richmond, VA to learn more about how to grow a small business.