business - Linkenheimer LLP CPAs & Advisors

5 Tips to Follow When Obtaining Cyber Insurance

Every business should dedicate time and resources to cybersecurity. Hackers are out there, in many cases far across the globe, and they’re on the prowl for vulnerable companies. These criminals typically strike at random — doing damage to not only a business’s ability to operate, but also its reputation.

One way to protect yourself, at least financially, is to invest in cyberinsurance. This type of coverage is designed to mitigate losses from a variety of incidents — including data breaches, business interruption and network damage. If you decide to buy a policy, here are five tips to help make the application process a little easier:

Be detail-oriented when filling out the paperwork. Insurers usually ask an applicant to complete a questionnaire to help them understand the risks facing the company in question. Answering the questionnaire fully and accurately may call for input from your leadership team, IT department and even third parties such as your cloud service provider. Take your time and be as thorough as possible. Missed questions or incomplete answers could result in denial of coverage or a longer-than-necessary approval time.
Establish (or fortify) a comprehensive cybersecurity program. Your business has a better chance […]

By Linkenheimer LLP|2023-08-23T14:41:09+00:00August 23rd, 2023|business, insurance|0 Comments

Use an S Corporation to Mitigate Federal Employment Tax Bills

If you own an unincorporated small business, you probably don’t like the size of your self-employment (SE) tax bills. No wonder!

For 2023, the SE tax is imposed at the painfully high rate of 15.3% on the first $160,200 of net SE income. This includes 12.4% for Social Security tax and 2.9% for Medicare tax. The $160,200 Social Security tax ceiling is up from the $147,000 ceiling for 2022, and it’s only going to get worse in future years, thanks to inflation. Above the Social Security tax ceiling, the Medicare tax component of the SE tax continues at a 2.9% rate before increasing to 3.8% at higher levels of net SE income thanks to the 0.9% additional Medicare tax, on all income.

The S corp advantage

For wages paid in 2023 to an S corporation employee, including an employee who also happens to be a shareholder, the FICA tax wage withholding rate is 7.65% on the first $160,200 of […]

By Linkenheimer LLP|2023-07-27T13:02:30+00:00July 27th, 2023|business, s corp|0 Comments

The Benefits of Operating Your Company with a “For Sale” Mindset

Selling your business may not be a current goal or something you plan to pursue in the future. However, it’s important not to dismiss the idea entirely, as running your company as if it were up for sale can bring numerous advantages. It is a strategic approach that emphasizes efficiency, organization, and value creation. By adopting this mindset, you can enhance your business operations, attract potential buyers, and maximize its long-term success. It also enables you to maintain excellent business records and address minor issues before they escalate into major problems.

Define Your Vision and Goals

Clearly articulate your long-term vision for the business and establish specific goals you want to achieve. Having a clear direction will help guide your decisions and actions.

Streamline Policies

Review and optimize your business processes to increase efficiency and eliminate any unnecessary steps or bottlenecks. Identify areas that can benefit from automation, technology, or outsourcing to improve productivity.

Imagine you’re in an elevator with a potential buyer, and you have a brief moment to describe your company. What would you say? Having a concise, easily understandable vision for your business is vital not only for appealing to outside buyers but also […]

By Linkenheimer LLP|2023-06-26T19:25:46+00:00June 26th, 2023|business|0 Comments

Traveling For Business This Summer? Here’s What You Can Deduct

If you and your employees are traveling for business this summer, there are a number of considerations to keep in mind. Under tax law, in order to claim deductions, you must meet certain requirements for out-of-town business travel within the United States. The rules apply if the business conducted reasonably requires an overnight stay.

Note: Under the Tax Cuts and Jobs Act, employees can’t deduct their unreimbursed travel expenses on their own tax returns through 2025. That’s because unreimbursed employee business expenses are “miscellaneous itemized deductions” that aren’t deductible through 2025.

However, self-employed individuals can continue to deduct business expenses, including away-from-home travel expenses.

Rules that come into play

The actual costs of travel (for example, plane fare and cabs to the airport) are deductible for out-of-town business trips. You’re also allowed to deduct the cost of meals and lodging. Your meals are deductible even if they’re not connected to a […]

By Linkenheimer LLP|2023-06-05T18:48:34+00:00June 5th, 2023|business, deduction, deductions, travel|0 Comments

Choosing an Entity for Your Business? How About an S Corporation?

If you’re starting a business with some partners and wondering what type of entity to form, an S corporation may be the most suitable form of business for your new venture. Here are some of the reasons why.

A big benefit of an S corporation over a partnership is that as S corporation shareholders, you won’t be personally liable for corporate debts. In order to receive this protection, it’s important that:

The corporation be adequately financed,
The existence of the corporation as a separate entity be maintained, and
Various formalities required by your state be observed (for example, filing articles of incorporation, adopting by-laws, electing a board of directors and holding organizational meetings).

Dealing with losses

If you expect that the business will incur losses in its early years, an S corporation is preferable to a C corporation from a tax standpoint. Shareholders in a C corporation generally get no tax benefit from such losses. In contrast, as S corporation shareholders, each of you can deduct your percentage share of losses on your personal tax return to the extent of your basis in the stock and in any loans you made to the entity. Losses that can’t […]

By Linkenheimer LLP|2023-03-27T17:16:20+00:00March 27th, 2023|business|0 Comments