Close-up on the new QBI deduction’s wage limit

The TCJA allows qualifying noncorporate owners of pass-through entities to deduct as much as 20% of qualified business income. But once taxable income exceeds $315,000 for married couples filing jointly or $157,500 for other filers, a wage limit begins to phase in. When the limit is fully phased in, the deduction generally can’t exceed the…

How to avoid getting hit with payroll tax penalties

For small businesses, managing payroll can be one of the most arduous tasks. A crucial aspect is withholding and remitting to the federal government the appropriate income and employment taxes. If your business doesn’t, you, personally, as the business’s owner, could be considered a “responsible party” and face a 100% penalty. This is true even…

Finding a 401(k) that’s right for your business

Ready to offer a 401(k) plan? Know your options: Traditional 401(k)s let employees contribute pretax dollars and give employers the option of matching contributions. But rigorous testing rules apply. Roth 401(k)s allow employees to contribute after-tax dollars and take tax-free withdrawals (subject to limitations). Safe harbor 401(k)s avoid strict testing but require certain employer contributions.…

Run the numbers before you extend customer credit

Funny thing about customers: They can keep you in business, but can also put you out of it. The latter circumstance may occur if you overly on a few customers that abuse their credit. To prevent this, keep your credit application form comprehensive and updated. When working with private companies, request financial statements and look…

Ask the right questions about your IT strategy

For many businesses, technology is an evolving challenge. To refine your IT strategy, ask the right questions. For example, are you still bogged down with paper files or traditional digital spreadsheets? More-advanced software may help. Could fully integrating key systems eliminate “information silos” and a digital asset-sharing policy improve collaboration? Do you offer training to…

Bookings vs. shippings: A sales flash report primer

Do bad sales months sneak up on you? Don’t forget the power of flash reports to display timely snapshots of critical data. For example, every workday, generate a flash report that shows total new orders taken (bookings) compared with total orders filled (shippings). After you’ve established the timeframes of bookings and shippings, assess your sales…

A midyear review should go beyond financials

Now’s the perfect time for business owners to stop, take a breather and engage in a midyear review. Naturally, this will involve looking at your financials. But go beyond those numbers and look at areas such as: 1) HR, specifically, how’s employee turnover trending compared with last year? 2) Sales and marketing, for example, are…

Could a long-term deal ease your succession planning woes?

As some business owners begin to consider retirement, they just can’t identify a suitable successor. One potential solution is a long-term deal that gradually cedes control to an outside buyer. The process typically begins with the owner selling a minority stake, followed by a tryout period to assess compatibility. If all goes well, the minority…