Blog - Linkenheimer LLP CPAs & Advisors

Budgeting and Forecasting: Your Keys to Financial Stability and Growth

In today’s fast-paced business world, financial clarity is not just beneficial—it’s indispensable. Effective budgeting and forecasting are essential tools that provide a strong foundation for both stability and growth, regardless of your company’s size or industry.

The Strategic Advantage of Budgeting

Budgeting involves more than simple number-crunching; it strategically guides your financial decisions and aligns your resources with your overarching business goals. By creating and adhering to a well-defined budget, your business gains a clear financial roadmap. This helps ensure disciplined spending, efficient resource allocation, readiness for investment opportunities, and proactive cash flow management.

When budgets are thoughtfully crafted, businesses gain the confidence to navigate daily operations smoothly while being strategically positioned for future growth. This financial discipline allows businesses to remain focused, flexible, and prepared for unexpected developments.

Forecasting: Anticipating the Road Ahead

While budgeting sets your financial course, forecasting is the practice of predicting future financial performance based on historical data, current trends, and market conditions. Effective forecasting enables your business to respond swiftly to potential opportunities or challenges by reducing uncertainty and enhancing decision-making capabilities.

Through forecasting, businesses can proactively manage their financial health, quickly adapt to changing market conditions, handle potential cash shortages, and […]

By Linkenheimer LLP|2025-05-27T17:11:14+00:00May 27th, 2025|Advisor, budget|0 Comments

Hiring Independent Contractors? Make Sure You’re Doing It Right

Many businesses turn to independent contractors to help manage costs, especially during times of staffing shortages and inflation. If you’re among them, ensuring these workers are properly classified for federal tax purposes is crucial. Misclassifying employees as independent contractors can result in expensive consequences if the IRS steps in and reclassifies them. It could lead to audits, back taxes, penalties and even lawsuits.

Understanding worker classification

Tax law requirements for businesses differ for employees and independent contractors. And determining whether a worker is an employee or an independent contractor for federal income and employment tax purposes isn’t always straightforward. If a worker is classified as an employee, your business must:

Withhold federal income and payroll taxes,
Pay the employer’s share of FICA taxes,
Pay federal unemployment (FUTA) tax,
Potentially offer fringe benefits available to other employees, and
Comply with additional state tax requirements.

In contrast, if a worker qualifies as an independent contractor, these obligations generally don’t apply. Instead, the business simply issues Form 1099-NEC at year end (for payments of $600 or more). Independent contractors are more likely to have more than one client, use their own tools, invoice customers and receive payment under […]

By Linkenheimer LLP|2025-05-21T17:05:27+00:00May 21st, 2025|1099|0 Comments

Can You Turn Business Losses Into Tax Relief?

Even well-run companies experience down years. The federal tax code may allow a bright strategy to lighten the impact. Certain losses, within limits, may be used to reduce taxable income in later years.

Who qualifies?

The net operating loss (NOL) deduction levels the playing field between businesses with steady income and those with income that rises and falls. It lets businesses with fluctuating income to average their income and losses over the years and pay tax accordingly.

You may be eligible for the NOL deduction if your deductions for the tax year are greater than your income. The loss generally must be caused by deductions related to your:

Business (Schedules C and F losses, or Schedule K-1 losses from partnerships or S corporations),
Casualty and theft losses from a federally declared disaster, or
Rental property (Schedule E).

The following generally aren’t allowed when determining your NOL:

Capital losses that exceed capital gains,
The exclusion for gains from the sale or exchange of qualified small business stock,
Nonbusiness deductions that exceed nonbusiness income,
The NOL deduction itself, and
The Section 199A qualified business income deduction.

Individuals and C corporations are eligible to claim the NOL deduction. Partnerships […]

By Linkenheimer LLP|2025-05-16T18:39:33+00:00May 16th, 2025|business, deductions|0 Comments

Critical Challenges Facing Today’s Business Owners

Running a business in California brings many opportunities, but also a unique set of challenges for employers. Employers today must navigate legal compliance, talent management, remote work issues, and rising costs, all while trying to run a successful business. As your trusted advisors, we want to highlight some of the most pressing issues California employers face today and how they can affect your bottom line.

Complex Employment Laws and Legal Risks

California is known for having some of the strictest labor laws in the country. The state imposes various requirements related to wages, overtime, breaks, sick leave, and discrimination protections. Failure to comply can expose a business to significant costs including penalties, lawsuits, and audits.

For example, misclassifying workers as independent contractors rather than employees can trigger serious consequences under Assembly Bill 5 (AB 5). Likewise, not adhering to meal and rest break laws or failing to maintain proper payroll records can lead to costly wage claims.

Employers must stay compliant and be up to date on current laws and court rulings. A simple oversight can create a major financial and legal liability.

Attracting and Retaining Talent

The labor market in California remains competitive. Attracting and keeping qualified […]

By Linkenheimer LLP|2025-04-22T20:14:16+00:00April 22nd, 2025|Advisor, business, employer|0 Comments

What Tax Documents Can You Safely Shred? And Which Ones Should You Keep?

Once your 2024 tax return is in the hands of the IRS, you may be tempted to clear out file cabinets and delete digital folders. But before reaching for the shredder or delete button, remember that some paperwork still has two important purposes:

Protecting you if the IRS comes calling for an audit, and
Helping you prove the tax basis of assets you’ll sell in the future.

Keep the return itself — indefinitely

Your filed tax returns are the cornerstone of your records. But what about supporting records such as receipts and canceled checks? In general, except in cases of fraud or substantial understatement of income, the IRS can only assess tax within three years after the return for that year was filed (or three years after the return was due). For example, if you filed your 2022 tax return by its original due date of April 18, 2023, the IRS has until April 18, 2026, to assess a tax deficiency against you. If you file late, the IRS generally has three years from the date you filed.

In addition to receipts and canceled checks, you should keep records, including credit card statements, W-2s, 1099s, […]

By Linkenheimer LLP|2025-04-15T18:38:28+00:00April 15th, 2025|audit, irs, taxpayer|0 Comments