Tax Less – Give More

money umbrellaThe big gift under the Christmas tree for most Americans this year was the 2018 Tax Code for individuals and businesses. Santa has not delivered a gift this significant for U.S. taxpayers for over 30 years. Most of us are happy he made it down the chimney.

To explain in our blog what’s included in the bill, and how it is likely to affect you and your business, would be redundant. Plenty has been written in the press and online. An article that we found to be easy to understand comes from The Motley Fool. The impact of the Bill is explained in layman’s language and we especially like the tables. According to the Fool, a few interesting individual deductions will soon be history. These include theft losses (no need to fill out that pesky police report), unreimbursed employee expenses (no incentive to bring the boss a Starbucks latte), moving expenses (it now pays to stay in one place), and employer-subsidized parking (no problem for us whose office happens to be in the suburbs).

For corporations, the GOP-proposed Bill is exciting. Businesses can sell worldwide without double taxation, and if you’re one of the those businesses who made money overseas but couldn’t afford to bring money into the U.S. because of taxation, it’s good news.

Read the entire article (really, it’s a good one).

Of course, not everyone is happy. Parents who sacrificed so their kids could go to college won’t get the $2,500 tax credit and charities are all wondering whether the goodness of the average American wage earner will be “as good” if they aren’t able to deduct charitable donations. We believe that generosity and compassion, more than a tax deduction, drive American giving. Next year will be our litmus test. In the last election, according to Pew Research Center, 54% of us Americans voted, but 60% of us gave to charity.

Charitable giving, in all its forms, transcends politics. Giving is as American as apple pie and will remain that way regardless of our politics, tax rules, and financial forecasts.

Hidden Tax Deductions

Waiting until the end of the tax year to find, verify, and record potential tax deductions can take a toll on what otherwise could have been more productive time spent growing the business. To make life easier, you can hire a professional bookkeeper to do this for you or use an outside service, like us. For anyone just starting a new business, we’ve put together a list of a few of the most overlooked small-business tax deductions.

starbucks blog#1 Fees paid to your accountant, lawyer or business consultant
To run small business successfully, you need sound advice and a great accountant and bookkeeper. Fees paid to these professionals are “ordinary and necessary expenses directly related to operating your business” and are deductible in the tax year they were paid.

#2 Losses on bad debts
If you paid advance wages to hire a hot-shot “marketing expert” and she bailed on you 10 days into the job because your dress code was just a ‘bit too conservative’ for her, the IRS allows you to deduct those lost wages. You can claim a deduction for most bad business debt, but only if you included the amount owed to you in your gross income.

#3 Carryovers
Carryovers are overlooked deductions from previous years. These are not “carryouts” —so Starbucks to-go while driving to work is not deductible. What if, for example, you started a home-based business and your expenses in the first year were actually higher than your income? You can “carryover” the loss to a future year when you did earn income.

#4 Startup expenses
Start-up costs are out-of-pocket costs for both looking into buying a business and getting the business started. These might include analyzing the marketplace and buying capital equipment like trucks or computers. Then there’s domain name registration fees, website and advertising costs, wages for new employees, consultant fees, costs to secure goods or licensing—the list can be seem endless. It’s a critical time to stay focused on documenting every cost so your accountant can maximize your tax deductions.

The size of the business does matter in terms of complexity, but whether a small business or large enterprise, it pays to keep impeccable daily records. Or simply hire us to do that for you.

Best Candidate for Small Business?

vote AmericaThis week the Republicans are making history in Cleveland followed next week by the Democrats in Philadelphia. I’ve attempted to compare the pros and cons of both candidates on issues that affect small businesses. Positions can change with each political speech, but this is what I’ve been able to accrue so far.


We now have data on Obamacare, and insurers are seeking premium hikes that will negatively affect small business owners and their employees. Clinton plans to defend and expand Obamacare by permitting those 55 or 50+ to voluntarily pay to join Medicare. Trump wants reform using free market principles and removing interstate barriers for the sale of health insurance.

Minimum Wage

Democrats typically favor raising it; Republicans believe that a higher minimum wage will hurt U.S. competitiveness and put even more disadvantaged Americans out of a job. Clinton will fight to raise it to $12 nationally, and it appears that Trump agrees it should be raised but may leave it to the States to decide levels.


Both candidates support jobs to fix the country’s infrastructure. Clinton wants to offer more job training, while Trump’s focus is on lower taxes and revisiting trade agreements. Although most small businesses aren’t affected by organized labor, Republicans favor right-to-work laws while Democrats oppose them.


Many small businesses pay taxes as individuals, and it’s increasing every year. Democrats want to offer small business tax relief, while Republicans want tax reform (e.g. allowing freelancers, sole proprietors, and unincorporated small businesses to file at lower corporate rates). Trump wants major tax cuts across the board to create incentive for economic growth. Clinton wants tax increases on high-income households, incentives for businesses to share profits with their workers, and tax cuts for caregivers and out of pocket health care costs.

Access to Capital

Getting a bank loan for a small business can be difficult, if not impossible. Both parties want the problem solved, but both have so far failed to come up with a well-developed plan that the banks can accept.


The Democrats want to cut red tape to start a business and reduce compliance cost, expand access to capital for women and minorities, and open up new markets. They want to simplify the compliance tax process, make global marketing easier, and crack down on big businesses stiffing the small businesses who work for them. They want to provide incubators, mentoring, and training to 50,000 entrepreneurs and small business owners in underserved communities.

The Republicans want to simplify and reform the tax code to allow businesses to generate enough capital to grow and thereby create jobs. They want to encourage investment in small businesses and make it easier to get financing and credit for manufacturing and expansion. They want to remove the barriers for regulation, contracting, and capital that impede growth. They want to consolidate federal training programs into State block grants for on-the-job and other training coordinated with local schools and employers.

Enjoy the convention TV coverage and, more importantly, VOTE in 2016!