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Digital Twins for Operational Excellence: Transforming SMB Operations

In the dynamic and competitive landscape that small to medium-sized businesses (SMBs) navigate, leveraging innovative technologies to streamline operations and enhance productivity is more than a strategic advantage—it’s a necessity. Among the myriad of technological advancements, the concept of digital twins stands out as a transformative tool for operational excellence. This article delves into what digital twins are, their benefits, and practical use cases for SMBs looking to pioneer efficiency and innovation in their operations.

Understanding Digital Twins

A digital twin is a virtual replica of a physical entity, system, or process. This digital mirror can range from something as simple as a model of a physical product to something as complex as the simulation of intricate manufacturing processes. By harnessing data from sensors and other IoT devices, digital twins offer real-time monitoring and simulation capabilities, enabling businesses to analyze, predict, and optimize their operations in ways previously unimaginable.

Benefits of Digital Twins for SMBs

1. Enhanced Decision-Making: Digital twins provide SMBs with a detailed, data-driven view of their operations, allowing for informed decision-making. By simulating different scenarios, businesses can foresee potential problems and make adjustments proactively, minimizing risks and costs.

2. Improved Productivity: By replicating processes […]

By Linkenheimer LLP|2024-03-19T15:40:18+00:00March 19th, 2024|business, Tech|0 Comments

Maximize the QBI Deduction Before It’s Gone

The qualified business income (QBI) deduction is available to eligible businesses through 2025. After that, it’s scheduled to disappear. So if you’re eligible, you want to make the most of the deduction while it’s still on the books because it can potentially be a big tax saver.

Deduction basics

The QBI deduction is written off at the owner level. It can be up to 20% of:

QBI earned from a sole proprietorship or single-member LLC that’s treated as a sole proprietorship for tax purposes, plus
QBI from a pass-through entity, meaning a partnership, LLC that’s treated as a partnership for tax purposes or S corporation.

How is QBI defined? It’s qualified income and gains from an eligible business, reduced by related deductions. QBI is reduced by: 1) deductible contributions to a self-employed retirement plan, 2) the deduction for 50% of self-employment tax, and 3) the deduction for self-employed health insurance premiums.

Unfortunately, the QBI deduction doesn’t reduce net earnings for purposes of the self-employment tax, nor does it reduce investment income for purposes of the 3.8% net investment income tax (NIIT) imposed on higher-income individuals.

Limitations

At higher income levels, QBI deduction limitations come into play. For 2024, […]

By Linkenheimer LLP|2024-03-11T16:52:39+00:00March 11th, 2024|business, deduction|0 Comments

Applying for a Commercial Loan with Confidence

Few and far between are businesses that can either launch or grow without an infusion of outside capital. In some cases, that capital comes in the form of a commercial loan from a bank or some other type of lender.

If you and your company’s leadership team believe a loan will soon be necessary, it’s important to approach the endeavor with confidence. That starts with having valid, well-considered strategic reasons for borrowing. From there, you need to engage your bank or a prospective lender with a strong air of professionalism and certainty.

Essential questions

First, familiarize yourself with how the process works. It’s essentially built on four basic questions:

How much money do you want?
How do you plan to use the loan proceeds?
When do you need the funds?
How soon can you repay the loan?

Your loan officer will also likely ask about your business’s previous sources of financing. So, be ready to explain how you’ve financed your company to date. Methods may include personal cash infusions, forgone salaries and sweat equity, as well as any equity contributions from friends, family members and outside investors.

Loan products

As you’re probably aware, banks and lenders offer a […]

By Linkenheimer LLP|2024-02-28T18:26:29+00:00February 28th, 2024|business, credit|0 Comments

What’s the Best Accounting Method Route for Business Tax Purposes?

Businesses basically have two accounting methods to figure their taxable income: cash and accrual. Many businesses have a choice of which method to use for tax purposes. The cash method often provides significant tax benefits for eligible businesses, though some may be better off using the accrual method. Thus, it may be prudent for your business to evaluate its method to ensure that it’s the most advantageous approach.

Eligibility to use the cash method

“Small businesses,” as defined by the tax code, are generally eligible to use either cash or accrual accounting for tax purposes. (Some businesses may also be eligible to use various hybrid approaches.) Before the Tax Cuts and Jobs Act (TCJA) took effect, the gross receipts threshold for classification as a small business varied from $1 million to $10 million depending on how a business was structured, its industry and factors involving inventory.

The TCJA simplified the small business definition by establishing a single gross receipts threshold. It also increased the threshold to $25 million (adjusted for inflation), expanding the benefits of small business status to more companies. For 2024, a small business is one whose average annual gross receipts for the three-year period ending […]

By Linkenheimer LLP|2024-02-14T17:04:53+00:00February 14th, 2024|accounting, business, cash, tax basis|0 Comments

9 Tax Considerations if You’re Starting a Business as a Sole Proprietor

When launching a small business, many entrepreneurs start out as sole proprietors. If you’re launching a venture as a sole proprietorship, you need to understand the tax issues involved. Here are nine considerations:

1. You may qualify for the pass-through deduction. To the extent your business generates qualified business income, you’re currently eligible to claim the 20% pass-through deduction, subject to limitations. The deduction is taken “below the line,” meaning it reduces taxable income, rather than being taken “above the line” against your gross income. However, you can take the deduction even if you don’t itemize deductions and instead claim the standard deduction. Be aware that this deduction is only available through 2025, unless Congress acts to extend it.

2. You report income and expenses on Schedule C of Form 1040. The net income will be taxable to you regardless of whether you withdraw cash from the business. Your business expenses are deductible against […]

By Linkenheimer LLP|2024-02-07T16:00:34+00:00February 7th, 2024|business, small business|0 Comments