Business Tax Planning

Hiring a Consultant for Your San Francisco Bay Area Business

ranjan.254 / June 19, 2025

Remembering and honoring Martin Luther King this week has me thinking once again about being a voice. It’s hard not to get inspired listening to the iconic words of the famous I Have a Dream speech (if you’ve never listened to the entire speech, it’s worth the listen — and it’s shorter than most people realize). It makes me think about how being a business owner is about so much more than merely “running a business.” What we do has a real impact on real people. And we can wield that influence in intentional ways. For many of us, we start with our teams. Without even trying, we impact their lives. (Quite literally because we give them a paycheck, but it goes beyond that). This impact can be for good or for ill, by the way. But when we see our teams right, we get the opportunity to know them as people, not just as workers. We get to support them in their pursuits and help them come through difficulties. We get to help them succeed beyond the walls of our San Francisco Bay Area businesses. This kind of care, letting them know how much you value them … well, I’m fairly certain that it goes a long way. One really practical way you serve your staff and contractors is by getting out their W-2s or 1099s on time. You have a couple weeks until they must be issued. Do not wait for the last minute on this one. If you need help, you know where to find us:Patti (408) 775-7790 Gale 408-775-7800 Now, speaking of your staff and maybe your 2023 business goals, perhaps you are needing to hire a consultant for some specialized areas in your San Francisco Bay Area business. I have thoughts. Hiring a Consultant for Your San Francisco Bay Area Business“Advice is like castor oil: easy enough to give but dreadful uneasy to take.” – Josh Billings HR or IT getting complex and time-consuming for you alone? Suddenly what seemed to be an advertising no-brainer looks complicated now? It’s only natural that as your company grows, functions that were once easy get too cumbersome for you to handle. Sooner or later, you wonder about hiring a consultant. Finding the right one to help your company, though, is like finding any other answer in business: It takes work. But you can handle it, and here’s how. What they do and what you need Consultants come in a lot of varieties and can help (or claim they can) in many areas of business from advertising and marketing to how to handle expanding growing human resources needs to advising on real estate purchases to protecting data as a company grows… among many others. You can’t know what you need until you know what you need. Your first task when hiring a consultant is to resist flailing for help in all directions and pin down what problem you want to tackle. You need details and for those, you need homework and questions. Rather than simply saying you want a consultant to help with your advertising, first, find out where you want to put the ads and for what products. You need tech help – but to install software, pick a server, or build a firewall? Do you need your consultant for one project or for semi-regular engagements over the long haul? The more specific, the better. What you can expect to pay For all the above, your big determinants are your budget going in and projected ROI. Until you’ve tacked those down, don’t even Google “hiring a consultant …” Pricing is where consultants really get varied. Understand that this can only be just an overview of their rates, but it should give you a snapshot to start budgeting. Consultants can charge by the project or by a length of time, such as a day or an hour. Small-business consulting fees can range from the high two figures to more than a grand (sometimes much more, depending on the industry, the length of the project, and the consultant). That breaks down to the low three figures per hour. Generally, the more technical or senior-level the expertise needed, the more expensive it’ll be. Makes sense – but how can you rein in costs yet still get the expertise you need? Some screening questions are the same as with any vendor. Is this a one-time consulting need? You’re better off with a fixed fee. Is the project ongoing, with repeated fine-tuning down the road? That’ll get you a lower fee than a one-time project but you will have to pay the fee more often, so can you negotiate a volume discount? For figuring out a base price to start, check your biz network for experience with consultants’ fees – and, more importantly, for referrals. Who they should be Unfortunately, hiring a consultant isn’t like hiring a tax preparer, plumber, doctor, or other professional who works under fixed and clear levels of certification. There are many certifications for consultants – but, for your purposes, those titles don’t mean as much as finding someone with smarts concerning your company and with whom you just click. Common sense will tell you the qualities of a good consultant: ability to listen, learn, and analyze; calm, objective judgment and the skills to document completely; insight and experience (maybe even on the expert level, though again this can cost you) to think strategically; inductive reasoning; and the ability to clearly communicate findings and recommendations so you can act on them. You might also need them to have a sharp eye for data or possess management or medication skills – sales ability doesn’t hurt either when it comes to convincing your staff of the sense of the consultant’s recommendations. When you’re screening candidates, bounce your problem off them directly. You can also give them hypothetical problems and ask for their judgment in ways to respond (much like you’d do with a job candidate). Ideally, you’re not the only one asking questions in the screening. A candidate should: Again, this

Business Tax Planning

ONeill & Bergado Wants to Know: Got a Business Exit Strategy?

ranjan.254 / June 19, 2025

The big day is almost here. No, not tax day. (Which is on April 18th this year — and you should be thinking about that now and start by grabbing a time on our calendar: Patti (408) 775-7790 Gale 408-775-7800 I’m obviously talking about the Super Bowl. And maybe you’re not paying attention because you don’t really care about football, but here’s why you should… The weeks leading up to the Super Bowl — and of course, the event itself — mean big money for not only the NFL but also the plethora of businesses capitalizing on the opportunities inherent in it. I just saw the news that all the ad space is sold out. But even small San Francisco Bay Area businesses like yours can get in on the action, if you’re creative. It might be too late for this for you, or it might not … but here are a couple quick ideas: Throw a party for your customers. Create promotions around it. After the game, do something related to the final score. Talk about the commercials in an email to your customers. The point is this: Many of your customers care about this event, whether you do or not. And as a business leader, you should care about the things your customers care about. Of course, you need to have a plan to take care of your needs too. And it should be forward-facing enough to align with your goals around an eventual exit from the business, whatever it looks like. So, let’s look at that, shall we? ONeill & Bergado Wants to Know: Got a Business Exit Strategy?“Look on every exit as being an entrance somewhere else.” – Tom Stoppard Whether you look at stepping away from your San Francisco Bay Area business next month or decades down the road, it makes sense that a transition strategy is vital. But are you in the crowd of business owners who lack a written plan? It’s a common enough occurrence. Why? Maybe you think the process will be informal, depending more on soft skills and relationships than on facts and documents. Or maybe you just don’t want to think about the subject and so convince yourself that the day will never really come. (It’s hard to let your business baby go.) As I’m sure you’ve guessed, this move doesn’t bode well. How you pass on your company can be just as important as how you started it — and not just emotionally. A written plan helps you get the most of what your small business is worth. So, let’s take a look at what’s involved in a business exit strategy. Where you are A written business exit strategy is a lot more than a note to remind you to shut off the lights when you leave on the last day. Turn your notions into a document by writing out a solid assessment of your worth, activities, and goals (typically at least three to five years out). Your plan should define your current state and establish your goals and a timeframe for selling/leaving. If you haven’t done this planning yet, don’t beat yourself up — that can only paralyze you to put the task off more. Most owners have no general plan for their next life, let alone one that’s written out. Fix the details What are the goals of your business before you leave it? Write them (helps make them real) and work backward: They should dictate your everyday operations of the company. For example: If one of your plans is to go public and someday sell stock, you need to follow certain accounting regulations as soon as possible. If you want to have an in-house or family successor, the quicker you look for and start training that person, the better. M&A? All the reason you need to determine your company’s worth. It’s easier to know where you’re going if you know where you are. How many hours do you put in at the company every day/week? Are your customers concentrated in any one niche or area (maybe too much so)? How stable are your revenue, supply streams, and staff? What are your company’s biggest strengths and weaknesses? Be honest, or your projections and plan won’t be worth much. Don’t forget your personal goals. What do you want for the future of your family, your estate, and yourself away from work? These answers can help you decide (among other things) when you want to sell or leave your company. Crystal ball time We don’t have one, either, but an inescapable part of creating a business exit strategy is estimating how long you want to be with the company and how you envision it (or your involvement in it) ending. If you’re a sole proprietorship and foresee no future for the company after you leave, you might want to just run it until the operating money is exhausted. This can mean planning when to increase your pay the nearer you get to departure. If you’re in a partnership, when should you start thinking about selling your shares (and what can you do in the coming months and years to make them worth more)? We mentioned M&A earlier. If you’d like to sell to a larger competitor, part of your written plan should detail how you’re going to secure clients in a niche that’s attractive to that larger company. Looking to acquire? How many companies and by when? Detail your timeframe for funding and for approaching those potential acquisitions. Depending on when in your company’s life you’re putting plan to paper, all of the above could be either immediate snapshots or cover two, five, or 10 years, or longer. Moving forward with your business exit strategy Proper valuation of your business is the lynchpin of your plan, so after you’ve penned all you know about your books, operations, AP, and AR, you’re not done yet. Call in your team and your financial, tax, and legal advisors to finish analysis of how much your company is worth. (We’re happy to help with this.) Bounce their feedback off each other, too. All plans

Business Tax Planning

Anticipating First-Year Expenses When Opening a San Francisco Bay Area Business

ranjan.254 / June 19, 2025

It’s February and love is in the air. (So are taxes. And Super Bowls. And bad tax software commercials – but I’ll leave those for another day.) Flowers and chocolates showed up on desks and countertops this week with sweet little romantic notes. Restaurants set those sweetheart menus for their in-love diners. And if you’re one of the “lucky” ones with heart eyes for that special someone, you might have spent $200 (or more) on your significant other this year. Being in love ain’t cheap. And anyone who celebrated Valentine’s Day knows that the same dozen roses you could have bought in January were almost double their price the second week of February. But if you’re a newbie in the love department, you might not truly understand just how much you’d have to shell out for that special someone. It’s easy to get caught unawares by the expense of it all and find yourself paying it off over months. First-time owners have a similar experience starting a San Francisco Bay Area business (oof… that segue). When you thought about opening a business, you knew it was gonna be costly, but just how much? When you’re new to the game, it’s tough to fathom just how fast the money will go – let alone anticipate all of those first-year expenses. As someone who knows well and has advised many new business owners, I want to give a little insight on this topic today. So, you can be better prepared… or to pass it along to someone who’s just now starting out. And… if you haven’t started wrapping your mind around filing your business taxes, this is my official note to get a move on that. Don’t act like a newbie here because it’ll cost you. Let’s get something on the calendar: Patti (408) 775-7790 Gale 408-775-7800 Now, onto today’s topic… Anticipating First-Year Expenses When Opening a San Francisco Bay Area Business“Expectations is the place you must always go to before you get to where you’re going.” – Norton Juster When you’re opening a business, it isn’t always clear how much money it takes to get started and keep it running for a year — but it is often underestimated. A recent poll of 700 small-business owners found that more than half of them lowballed what they’d have to spend during their first year. That’s a lot of miscalculation — and a lot of potential for having to shut the doors before you ever get off the ground. No wonder a third of small companies go out of business within two years. All that to say: It pays to know what you’re getting into and how to survive those crucial first 12 months after opening a business. Where does all the money go? Surveys have shown that business owners drop from 35 to 100 grand in the first year, depending on whether their company is completely online or completely brick-and-mortar. Here’s the breakdown: about a third for inventory, a fifth on equipment, 10% to 15% each on location and taxes, and a little under 10% each for utilities and payroll. Other common costs include insurance and marketing. New owners have said that surprise-heavy expenses have included taxes, technology, various fees, and (less of a surprise these days, for sure) shipping costs. Where’s the money coming from for all that? Most sources are familiar: investors (such as venture capitalists and angel investors), crowdfunding, and borrowing from family or friends. The U.S. Chamber of Commerce claims that most startup “seed rounds” are around half a million to 2 million bucks. One troubling surprise for some brand-new San Francisco Bay Area businesses is the lack of conventional funding. Commercial business loans can be hard to come by for completely new companies that have no proof of future revenue. Many owners turn to their own money in the form of their everyday savings, nest eggs, alternative lenders (such as peer-to-peer lending, with its risks), credit cards, or personal loans. Common mistakes What goofs should you avoid when opening a business? Thinking ahead Small-business owners in the poll we mentioned brought in between 50 grand to the very low six figures in their first year — respectable, but not all profit. In fact, only 15% of business owners polled started to turn a profit in under a year (the percentage jumps to 2 out of 5 in the second year). Plan to survive your first year of business right when that year begins by figuring out your startup costs beforehand. The U.S. Small Business Administration has a calculator for this; we can help, too. Also, sooner rather than later: Visualize your ideal client. This concept will evolve, of course, but you don’t necessarily want to take every client who happens to walk through your door. Don’t try to be everything to everyone. That goes for every marketing or networking event, too — don’t be invisible, but don’t spread yourself too thin, either. Trim costs early on. The bag lunch? Public transit instead of driving your own car? Do you really need all that office space right from the get-go? Keep your business plan nimble. Things will change more than you can imagine. Be patient and keep your eye on your goal, but adapt along the way. The process of opening a business is too important to wing it on your own. Ideally, you want other professionals around you, helping you get off the ground or keep flying. Feel free to count us in. Getting you started right, Patti ONeill and Gale Bergado

Business Growth, Business Tax Planning

Deducting Travel Expenses for Your San Francisco Bay Area Business This Year

ranjan.254 / June 19, 2025

Who can believe that it’ll be one year this week since the war in Ukraine began. Unfortunately, it doesn’t seem like there’s an end in sight — a heavy realization for those caught in the crosshairs of it all… Looking back to last February, I can say it’s been a tough year for businesses as well. Supply chains were already interrupted and production was slow (a big obstacle for businesses everywhere). And then inflation took its toll, and you’ve found yourself in constant pivot mode to keep up. (Not to be a Debbie Downer, but I do want to keep it real for my San Francisco Bay Area business owner clients — a strong value of mine.) The point is: Every dollar counts these days. Which means, finding ways to save your business money counts too. Besides examining operating costs and cutting out unnecessary expenses, you can also take a look at your tax situation. There are A LOT of ways you can save when it comes to that. Though not for 2022, unfortunately. (Speaking of which — have you scheduled an appointment to get your 2022 filing squared away? Time to get on that: Patti (408) 775-7790 Gale 408-775-7800 But looking ahead to 2023, there are things you can do to optimize your tax situation. Let’s start with deductions, specifically those having to do with travel. Deducting travel expenses is an area with a lot of change in recent years, but by approaching it right, you could take advantage of some real savings. Let’s dive in. Deducting Travel Expenses for Your San Francisco Bay Area Business This Year“It is more deductible to give than to receive.” – Henry Leabo It seems we’ve reached the point where 2020 is far enough in the rearview mirror for the world to start moving again… which naturally involves more business-related travel. Travel costs have been one of the most famous tax deductions available to small businesses like yours — and they can be a real help in lowering your taxes. But how you can claim the deduction and for how much is tricky and changes all the time. As we head into filing 2022 taxes and plan ahead for 2023, this will get you started on some things you should know about deducting travel expenses. Insight #1 for Deducting Travel Expenses: What you can deduct In a nutshell, you can take business travel deductions if, as the IRS says, they’re “ordinary and necessary.” Examples include: This is a partial list, but you get the idea. (Note: If you’re self-employed, you deduct travel expenses on your IRS Schedule C. If you’re in the National Guard or military reserve, you can claim a deduction for unreimbursed travel expenses you laid out while on duty.) Tax regulations love to change frequently, and the business travel deduction rules are no exception. So… what’s new lately? Standard mileage rate. You use this number as part of one way (the IRS calls it the simplest way) to deduct your mileage: Multiply the rate by the number of miles you drive (make sure you can back it up with records and logs) on the job. For 2022, the standard mileage rate is 58.5 cents per mile for the first half of the year and 62.5 cents per mile in the second half. So far for this year, the rate is 65.5 cents a mile. (We’re not sure why the IRS uses half-cents, either.) Meals. Historically, you’ve been able to deduct only 50% for food and beverages. If you’re still working on 2022 taxes, though, you generally get a special break and can deduct 100% on food and beverages from a restaurant. Conditions apply — check with us. By the way, the IRS seems to love the word “lavish.” You can’t deduct expenses for meals that are “lavish” or “extravagant” but only for those that are “reasonable based on the facts and circumstances.” The IRS claims they won’t kick your deduction just because a meal costs more than a set dollar amount or because you ate somewhere “deluxe.” Insight #2 for Deducting Travel Expenses: Where’s ‘away?’ The IRS says you’re traveling if you are away from home longer than an ordinary day of work. You also must need to have to sleep or rest to meet the demands of your work while away from home (napping in your car doesn’t count — yes, they literally specify this). What’s your “tax home?” For the purposes of business deductions, it’s generally your regular place of business (or post of duty if you’re in the military), no matter where your family home is. If you have more than one regular place of business, your tax home is your main place of business (where you spend the most time, do the most work, and make the most money). If you have neither because of the nature of your work, your tax home may be the place where you regularly live. If you don’t have any of the above, the IRS considers you an itinerant and you can’t claim a travel expense deduction. Deducting Travel Expenses Insight #3: Little extras Incidental expenses. These fees and tips to porters, baggage carriers, hotel staff, and so on are deductible. Incidental expenses don’t include costs of laundry, lodging taxes, phone calls, and transportation between places of lodging or business and places where meals are taken… to name a few. If you want to keep it simple, you can use the optional method instead of actual cost. This means you would deduct five bucks a day for incidentals only (prorated for partial days). Again, conditions apply. Recordkeeping. Many a deduction has been chucked due to a shoddy record. Save those receipts. Keep all expenses separate, even if they occur on the same day. Keep a log and note the biz expenses as they happen (aka “contemporaneous documentation”). The IRS has a good chart of how to prove expenses. You can check it out here. And of course, always feel free to reach out to us with questions. Deducting travel expenses can be

Business Tax Planning

ONeill & Bergado’s Tips for 2023 Small Business Tax Planning

ranjan.254 / June 19, 2025

Forward-thinking is a must in business… that goes for your taxes too. And I’m going to dive into what that looks like today. But first, let’s talk about your tax filing. The S corp and partnership filing deadline is coming up (March 15 to be exact). While we’ll probably file an extension for you if you’re in this category and just now looking at your taxes, you’ll want to dial in VERY soon. But also, there’s little more than a month before personal tax returns are due. Let’s set procrastination aside and get on those returns so you can get Uncle Sam off your back and keep your San Francisco Bay Area business functioning optimally:Patto (408) 775-7790 Gale 408-775-7800 (And, of course, we will put clients on extension as needed.) Now, let’s get back to that forward-thinking… Taxes are more than a “once a year” obligation. They’re something you want to optimize for all. year. long. There are numerous practical strategies you can implement in your business — accommodating estimated payments in your budget, deduction-minded travel planning, and timing your expenses, to name a few. Tax-optimizing your San Francisco Bay Area business starts by knowing what the IRS has made available to you as a business owner. But even more than that, it’s knowing how to take advantage of what’s available… and that ain’t easy – Uncle Sam’s made sure of this. Getting into planning mode is going to require you actively carving out some time in your busy business owner schedule… whether you’re facing doing taxes on your own (not recommended) or meeting up with your favorite tax pro (wink, wink). In the interest of offering you some of my expert insight at no extra cost to you, I’d like to start the small business tax planning conversation here… ONeill & Bergado’s Tips for 2023 Small Business Tax Planning“Luck had nothing to do with this. It was good management and hard work.” – the Goose from Charlotte’s Web Now that covid-related tax relief is fading for most companies, it’s worth honing in once again on tried-and-true small business tax planning strategies. Of course, we first want to get you through the spring’s filings of tax returns — but after that comes all the rest of 2023, with plenty of tax developments that determine the best plan for this year (and beyond). Small business tax planning insight #1: Get ready for filing Make sure your documentation is on hand for your business expenses. Take a look at your company’s return(s) from last year and think about what you and your company did through 2022 to qualify for evergreen tax concerns such as capital purchases, payroll, maybe a home office deduction, and so on. If you have questions, reach out as soon as you can. A few general reminders for 2022 taxes: Speaking of which, your mileage may vary. (Your deductions depend on the circumstance of your small business.) Check with us. Small business tax planning insight #2: Looking ahead There’s a lot of 2023 left for you to do business tax planning. What should you be looking at in general? Business tax-filing deadlines are your first planning details, and through the rest of 2023, there are more than a dozen federal ones (depending on your business structure) beyond Tax Day on April 18. You can see the IRS filing schedule for this year here along with details on extension deadlines — and of course, you can always check with us, too. Beyond just knowing when and what you’ll have to file, having the schedule at hand will help you budget throughout the year if you deal with such obligations as paying estimated taxes every quarter. Planning strategically often makes tax liabilities a little easier to swallow — and can make saving taxes and improving your business easier, period. Considerations: Small business tax planning insight #3: Further down the road Make some preliminary notes for four or five months from now, when you’ll be closing in on the final quarter of 2023. That’s the time, for instance, to put into action your plans to accelerate or defer into 2024 income or expenses, depending on your tax situation. (We can help you decide.) And we’ll keep you up to date on tax developments that affect your business as the year progresses, such as the increasingly tricky rule about far-flung tax jurisdictions and remote workers. Taxes never stop — so your small business tax planning shouldn’t, either. We’re here to help you build the best future possible for your San Francisco Bay Area business. That includes setting you up for success, both during tax season and throughout the rest of the year. Always here to help, Patti ONeill and Gale Bergado

Business Tax Planning

Keeping Tax Records: San Francisco Bay Area Small Biz Edition

ranjan.254 / June 19, 2025

If you’re doing the books, juggling the hiring, navigating supply problems, delivering work to clients, and thinking about big-picture items for the year … you might be a small business owner. If you’ve got a lot on your mind and more gets added daily? You might be a small business owner. If you don’t have a big staff and get pulled in a lot of different directions and you’re doing the mundane task of organizing your tax documents … you might be a small business owner. Most business owners are not equipped to do all of these tasks well, so, you do the best that you can. I get it. Now, ideally, as you grow your San Francisco Bay Area business, you’ll want to delegate some of that out to others on your team. That’s why, today, I’m laying out the tax document 411 for you, so you can be equipped to face that task and put it in the hands of a trusted team member. Now that we’ve done the work of positioning you in the best tax situation possible, you’ll need to hang on to your paperwork for a while. But you know tax obligations don’t stop mid-April for a business owner. If you want to talk about some ways to organize and automate some of those financial tasks, I’m here to lend my insight and get you prepared for the rest of the year – and even years to come: Patti (408) 775-7790 Gale 408-775-7800 So, let’s start the conversation by discussing keeping tax records – the what and the how long… Keeping Tax Records: San Francisco Bay Area Small Biz Edition“You’ve got to be on top of your record-keeping. Imagine one day if a major bank is taken down and the records are gone.” – Ross Perot Jr. The federal tax filing day may be over for some people, but if you’re running a small business, you know the tax season never really ends. Starting with documentation. How long do I have to keep business tax documents? is anatural question this time of year – and keeping tax records looms large as you often use them for financing and budgeting and paying taxes at other times of the year. Here’s how to stay on top of that. The timeframes for keeping tax records Generally, keep any record that supports any figure on your tax return, such as income, expenses, tax credits, or on your tax return deductions (home-office or meals and entertainment are big examples) until the period of limitations for that tax return runs out. Business tax returns and other tax documents have a statute of limitations (how long the IRS has to question your tax filing) similar to that of personal tax returns and documents: Generally, the higher your income and profits and the more complicated your return, the better it is to keep complete tax backups as long as possible. Keep your state tax documents with your federal ones. Keeping tax records: The “other” documents Many records can intertwine with the tax ones of your company, and you may need to keep these for different lengths of time. Legal documents like deeds, patents and trademark registrations, property appraisals, rental agreements, bills of sale, and ownership records you keep indefinitely. Keep all accounting documents and anything bank-related such as account, credit card, and investment statements and canceled checks for at least seven years, maybe longer (check with us regarding your particular circumstances). Keep insurance documents until you replace expired ones. By the way, regulatory agencies also often have their own retention recommendations. The Occupational Safety and Health Administration, for instance, says to keep records of serious work-related accidents for five years. The U.S. Department of Labor says to keep most payroll records for at least three years. The U.S. Chamber of Commerce says to keep even job advertisements, applications, and resumes on file for at least a year. Other agencies might have retention requirements, too, depending on the state and on your industry. We can help you check. Ditto the ever-changing breaks for businesses, too, such as bonus depreciation and the meals and entertainment deduction — especially get with us on this one if you’re thinking of amending a past return to re-do expense deductions. How long should you keep your tax returns themselves? Well, you never know when a given year’s return will come in handy for filling out future returns or if you decide to amend one someday to try for a past tax break like the Employee Retention Credit. And lenders and other sources of financing may want your return for years to come. Not to mention that the IRS got a big funding bump last summer as part of the federal Inflation Reduction Act and has pledged more scrutiny of many taxpayers (though their focus, they’ve said, is targeting accountability for those in very high tax brackets). Keeping tax records: Storing them Keep your tax returns and, for that matter, many of your records for good. It’s never been easier. The IRS is finally catching up with the private sector in its common use of digital documents. E-documents for your taxes must be clear and identical to the paper original. Desktop printers can now digitize a document. You can put it on a thumb drive or other external media – which remember could itself be obsolete in a couple of decades – or upload it to a cloud storage service. Some are from household names like Amazon and Google but others are more geared toward businesses and come with varying price tags. When it does come time to toss old tax records, DO NOT just heave them into the dumpster behind the parking lot – that’s treasure for identity thieves. Use your shredder instead. Here’s a helpful reference chart for keeping tax records: How long should you keep biz tax records? Details 2 -3 years Three years from the date you filed your original return or two years from the date you paid the tax, whichever is later, if you file a claim

Business Tax Planning

How the Bank Crisis Affects San Francisco Bay Area Business Owners

ranjan.254 / June 19, 2025

Now, I know that I recently started talking about the new FinCEN reporting requirement and promised a part two… which I’ll absolutely get to in an upcoming blog. But this time I wanted to take the opportunity to speak about the banking “crisis” that has a lot of San Francisco Bay Area business owners frantically deciding how (and if) they need to respond. You and I can see that the US economy seems to be built on quicksand right now. Things are shifting faster than some of us can keep up with as we watch banks sink and businesses go right along with them. Don’t panic – even as you’re wondering what you should do right now to keep your business stable and moving forward. That conversation certainly goes beyond one weekly strategy note, but I wanted to step into the fray today to give some perspective. There are a lot of things you can examine in your business to spot financial drains and capitalize on profit-bringing endeavors. That’s something we should talk about sooner rather than later. Book a time to have that conversation now:Patti (408) 775-7790 Gale 408-775-7790 Until then, let’s take a deeper look at what’s happening in our economy (bank failures and all) and see what that means for you and your San Francisco Bay Area business. How the Bank Crisis Affects San Francisco Bay Area Business Owners“The fundamental business of the country … is on a very sound basis.” – Herbert Hoover Silicon Valley… Signature… First Republic… Three rapid bank failures have just flooded the business world — an environment that hasn’t seen such things in a while. It’s worth asking right now: What are bank failures the end of? Or more importantly: What are bank failures the start of? Bank busts have been more common throughout American history than we usually remember. This week, I want to address our potential crisis by giving an overview of past problems and some of their causes — and what other small businesses are thinking about how to respond. We’ll analyze some of those response strategies next time. History repeats itself Just as in our times, bank sinkings have always cropped up as signs of wider, spreading economic distress — such as the global changes (the end of the Napoleonic Wars) just before the panic and widespread bank crashes of 1819. Not 20 years later, the country saw a recession that lasted into the 1840s sparked in part by a land-price bubble. (Historically, market “bubbles” have often contributed to economic and banking problems.) Interlaced finances in our modern world are nothing new, either: In 1819, one of our country’s first federal banks had to cut credit to state-chartered banks, leading to the collapse of many of them amid depositors’ runs. In 1873, speculation in railroad bonds (combined with the demonetizing of silver, inflation, and high-interest rates) ignited bank failures in the country’s first great depression. In 1907, major losses by two copper speculators rippled out to become runs and insolvency on associated banks. Loans to the banks stemmed the runs, but the crisis soon intensified into runs on many New York-based financial institutions. This copper mess of more than a century ago has connections with today’s problems. Steps taken to solve it gave birth to some of the tools and philosophies used by the Federal Reserve today, and observers note how some of those New York companies resemble today’s shadow banks. The Great Depression and afterward On “Black Tuesday” (October 29, 1929), the greed and guesswork that had inflamed Wall Street through the “Roaring Twenties” joined rising unemployment and shady financial reporting to bring about the true Great Depression. Bank runs and failures spread over the next few years until President Franklin Roosevelt ordered a “holiday” in which all banks had to cease operations until they could show solvency. Thousands of banks that had extended too much credit and ignored the Federal Reserve’s warnings went under through the 1930s — and the process birthed the Federal Deposit Insurance Corporation (FDIC), which guaranteed that depositors would not lose their deposits in member banks in the event of a failure. More recently, the Savings and Loan crisis began right after the rampant inflation of the 1970s and intensified regulation; more than 1,000 S&Ls failed through the 1980s. In 2008, the Great Recession began when two investment banks — Bear Stearns and Lehman Brothers — became insolvent. Rampant speculation in housing markets contributed to the crisis. From it, however, came regulatory reforms that included the Dodd-Frank Wall Street Reform and Consumer Protection Act that helped ensure that banks “too big to fail” were capitalized to handle the next crisis. (Those regs have since been scaled back.) From 2008 through 2015, more than 500 banks failed from this crisis, but the only runs were on “shadow banks” that lacked government backup. What’s happened now? Silicon Valley Bank invested heavily in Treasury bonds, the value of which was hammered by the Fed’s hikes in interest rates to fight inflation. A run soon fed on itself as the bank was forced to sell more and more Treasuries at a loss. SVB was the largest bank failure since 2008 and the second-largest bank failure in American history, behind Washington Mutual during the Great Recession. Signature Bank was in a similar situation to SVB. It also failed and was the third-largest U.S. bank failure ever. On May 1, First Republic Bank folded (taking SVB’s spot as the second-largest American bank failure). What mood are small businesses in as crisis ripples through the economy and lending sources tighten? A recent survey of accountants who represent more than 100,000 small businesses revealed worry about the challenges ahead of getting capital, among other concerns. The economy’s expected to get worse for small businesses over the next 12 to 18 months, most respondents said… and even more specified that small businesses’ ability to access fresh capital would worsen – not to mention the unknown risks of shadow banks and other new varieties of lenders. “Line up any capital or

Business Tax Planning

New FinCEN Reporting Requirements for San Francisco Bay Area Businesses (Part 2)

ranjan.254 / June 19, 2025

Memorial Day doesn’t always mean rest for the small business owner — depending on what kind of industry you’re in. There’s often a lot of hustle around national holidays (special promotions, big sales, holiday weekend shopping). And debt ceiling deals to make, apparently, since that’s what our government was working on over the weekend. Some notables: What a way to spend a holiday weekend. Even with any “extra” in your arena, I hope you had a moment to enjoy some beginning-of-summer weather and something off the barbecue. A few weeks ago, I promised a part two on the FinCen reporting requirements. And today, I’m going to deliver. As of next year, thousands of small companies will have to start reporting information on their owners, thanks to the Financial Crimes Reporting Network (FinCEN). The agency looks to fight financial criminals, and therefore wants small companies and corporations to share information in the spirit of saving us all from the crooks. Before I share too much, let me say: This is something you’ll want to make sure you pay attention to. There are some exemptions, so read on to know if your business falls in that purview. And if it does, my team and I can help with the nuances of it for your San Francisco Bay Area business. When you’re ready for that, we’re right here:Patti (408) 775-7790 Gale 408-775-7800 So, what does that look like for next year, and what do you need to know? Let’s have a look. New FinCEN Reporting Requirements for San Francisco Bay Area Businesses (Part 2)“With great power comes great responsibility.” – Uncle Ben, “Spider-Man” If you don’t know about this new requirement popping up for scads of small businesses, it might come as a bit of a surprise — which is why we’re going to look at it today. A few weeks ago, we quickly overviewed this reporting requirement. Let’s look at a few more details about what exactly the feds want to know. ‘Corrupt actors’ To refresh your memory: FinCEN looks to implement parts of the Corporate Transparency Act that govern the access to beneficial ownership information, or BOI. The reporting regulations kick in next January 1. They require most small corporations, LLCs, and similar entities created in or registered to do business in the U.S. to report information about their beneficial owners. The information will go into a database that helps track “criminals, corrupt actors and anyone trying to hide ill-gotten gains in the United States” to the inspection of law enforcement here and in other countries. The feds claim that the states (the level of government where shell companies register, if they register with anybody) can’t currently do enough to track international bad guys who might be setting up shop. Who do they want? So, they want information on beneficial owners. Who exactly is that? In general, a beneficial owner directly or indirectly exercises “substantial control” over a company — or owns or controls 25% or more of the “ownership interests” of the reporting company. “Substantial control” can involve all the company’s senior officers or anybody directing or with most of the influence over big decisions for the company. “Ownership interests” can include simple shares of stock and equity as well as more complex debt instruments and trusts. You’ll have to report four pieces of information about each of your company’s beneficial owners via a FinCEN website: These documents include a valid driver’s license or government-issued ID, which includes a U.S. passport. If you don’t have any of those, your reporting company can use the ID number from a non-expired passport issued by a foreign government. Reporting companies created after next January 1 will have to provide these four pieces of information and document images for company applicants. An “applicant” can be whoever files the document that creates or first registers the reporting company and whoever is primarily responsible for directing or controlling the filing of the document. No reporting company will have more than two applicants (for example, the founder and the filer of documents). Does my company need to report? The rule identifies two types of reporting companies: domestic and foreign. A domestic reporting company is a corporation, limited liability company (LLC), or any entity created by the filing of a document with a secretary of state or any similar office under the law of a state or Indian tribe. It’s the same for a “foreign reporting company” except that it’s formed under the law of a foreign nation and is registered to do business in any state or tribal jurisdiction. FinCEN expects reporting companies will also include limited liability partnerships, limited liability limited partnerships, business trusts, and most limited partnerships. Twenty-three types of entities are exempt: certain types of banks and credit unions; some securities brokers and other types of companies registered with the SEC; some companies associated with insurance; and public accounting firms and some utilities. (You can see a list and more details here.) (Many of these, by the way, are already regulated by the government and already disclose their BOI information.) Reporting companies created or registered before January 1, 2024, will have just until New Year’s Day 2025 to file their initial reports. Companies created or registered after January 1, 2024, will have 30 days after receiving notice of their creation or registration to file. Observers have said that roughly 32 million reporting companies are anticipated in the first year of reporting. Yeah, that’s a lot. Is the database safe? Naturally, you’re probably concerned about how safe this database is. Generally, FinCEN can release your BOI “under specific circumstances” to: FinCEN says the IT system will be cloud-based and “will meet the highest Federal Information Security Management Act (FISMA) level” — which basically admits that a breach would have “a severe or catastrophic adverse effect.” You can’t argue with that, no matter how you may feel about the new regulations. It’s natural that you’d have more questions on this FinCEN reporting requirement and now would be the time to sort out the details as they

Business Tax Planning

Tracking Your San Francisco Bay Area Company’s KPIs Effectively

ranjan.254 / June 19, 2025

Raise your hand if you or your workers, in any way, still work remotely post-pandemic. It’s a common enough reality — maybe more so now even than 2020. Working in sweatpants from the comfort of your San Francisco Bay Area home is infinitely better than dress shoes and uncomfortable desk chairs — and cheaper than paying high business space rent prices. But with so many companies going remote and giving up their brick-and-mortar space, it’s caused a bit of an office space crisis in major cities like NYC (up to 20% of spaces being unused nationwide). That’s looking like an 800 billion loss for urban office real estate value — that’s a KPI to pay attention to… and figure out alternatives for (like converting said offices into rental properties). Getting creative with turning losses into profits is an important skill for you as a business owner these days. And I know you understand that. The past three years have forced you to figure out ways to adapt to new realities. But you couldn’t do it without these really important things that are really the central figures of your business. Yes, I’m talking about KPIs. But utilizing these performance indicators the right way is more than just printing a report. It’s knowing which ones to set up, how often to track them, and how to organize them into something coherent you can actually use. And I want you to be able to USE them to keep you sharp and well-positioned for every economic moment — opportune or difficult. Your success matters to you… and to me. So, let’s start that conversation here: (408) 775-7790 Tracking Your San Francisco Bay Area Company’s KPIs Effectively“Performance stands out like a ton of diamonds.” – Harold S. Geneen Measuring performance in your company is an indispensable tool for small business owners. The standard metric for that measurement: the KPI — or “key performance indicator.” KPIs are performance quantifiers — recorded and tracked numbers — that have a specific and clear value, such as a dollar figure for increased sales over a certain period. They’re how you see at a glance if your company is on course. You create KPIs by setting that goal — such as a doubling of profits in the next three years — and working backward to decide what has to happen and when. In many ways, KPIs formalize an instinctive method you have for measuring incremental success. The concept falls down, though, if you don’t track your progress. So, how should you do that? And how often? Setting it up This depends on your company’s goals, but some common KPIs look at revenue (average profits, total revenue, profit margin); employment stats such as turnover, employee performance, and vacancies; customer service (average call time, customer satisfaction); customer retention and acquisition (and the revenue associated with each); and marketing (sales generation, overall effectiveness). Your specific industry might dictate use of other KPIs, such as website traffic for an e-commerce company, table turns for a restaurant, or rejections for a production line. Among other points: There’s no set number of KPIs you should be tracking. It’s better to use fewer KPIs and make sure the ones you use are accurate. For each goal you set, set only around six KPIs (that of course correlate to that goal). How often you should be tracking KPIs Basically, you’re balancing frequency and time when tracking KPIs — giving concepts a chance to mature but not so long that they spray too far off course. Some goals (such as annual revenue or employee tenure) can be tracked quarterly or semi-annually and still have time to make adjustments. Other KPIs are more immediate in their lagging/leading indicators. The actions/initiatives that those measure can have a quicker impact on your bottom line. Customer retention or conversion rates, for instance, require more constant and steadier attention and lend themselves to faster, easier adjustments. For these KPIs, monthly tracking is better. Here’s another factor: How much time and money do you need in order to adjust once you spot a problem? Let’s say your KPI shows you need to hire two new salespeople to meet an annual revenue goal. That’s a lengthy adjustment involving advertising, time, interviewing, onboarding, and training. The sooner you spot that KPI, the better — meaning tracking frequently is best. It’s the same for product development to boost sales and revenue for the end of the year. But suppose your KPI shows your customer service people aren’t answering calls within the specified number of rings or customer service emails are sitting unanswered for too many hours or days? That could be a quick adjustment of bringing the problem to the attention of the department manager or talking to the reps directly. The quicker the needed adjustment is to make, the less frequently you have to track the KPIs. You have a lot on your plate, I know — so set your calendar app to ping you weekly or monthly when it’s time to look at your KPIs. Do push to track consistently. The whole exercise loses effectiveness if you don’t. Organizing the info You want to go visual with the reports, rather than using too much text. The quicker the information can be digested, the quicker you can make decisions using it. (This becomes even more important when considering multiple KPIs. Consider using different colors for different departments.) As charts and graphs come in just enough formats to be completely befuddling, it’s best to look at a few examples as you figure out how to report your KPIs. A lot of small businesses also get started with Google Analytics, (which experts do say that like, many freebies, can take you only so far in your presentations). When you start out tracking and using KPIs in your San Francisco Bay Area business, it can feel as much of an art as it is a science. Give yourself time to get the hang of it, and your future self with thank you for making it so much easier to plan strategically for your

Business Tax Planning

Why San Francisco Bay Area Married Owners Might Choose the QJV Route

ranjan.254 / June 19, 2025

Remember three years ago when you depended on Zoom for work meetings and virtual schooling for your kids? While you’re probably really grateful the second one isn’t a reality anymore, the first one still had its appeal (unless something like this happened). Working from home had its perks. In a stroke of irony, the company that enabled us all to work from home during the era of social distancing recently started requiring their employees to spend some time in the office. Time to swap sweats for slacks. Unless you and your spouse run your San Francisco Bay Area business together. In that case, your WFH options might be more flexible. But there are other considerations for married joint ventures beyond working location that I want to bring up today. As far as business ownership and marriage go, you can obviously have one without the other, but when you and your spouse team up to build a business together as co-owners, it’s a good idea to look at the implications of that — both in a relational sense and but also (for today’s purposes) in an entity structure sense as well. See what I mean below… Why San Francisco Bay Area Married Owners Might Choose the QJV Route “To get the full value of a joy you must have someone to divide it with.” – Mark Twain More than one married couple has taken their domestic success professional, working together to build a company. It’s an old story, and it can be a happy one – but it can also run afoul of tax law without proper planning. The IRS maintains that business partners should be filing a partnership tax return, period, the IRS Form 1065. A partnership that fails to file a 1065 (and a lot of married “co-workers” neglect to) risks penalties. Let’s look at those hefty fines – and a smart way for married owners to avoid them. The 1065 IRS Form 1065 is an annual tax return used to report the income, gains, losses, deductions, credits, and other information from a partnership. A partnership doesn’t pay tax on its income but passes through profits or losses to its partners, who include partnership items on their own tax returns. You file a 1065 on the 15th of every March, unless a holiday or weekend changes that deadline. Uncle Sam takes this form seriously: The penalty for failing to file a 1065 by the due date (barring “reasonable cause,” which is up to the IRS), is 220 bucks for each month up to 12 months multiplied by how many people were partners in the partnership during any part of the tax year for which the return is due. Plus up to a quarter of any taxes you failed to pay. That’s potentially pushing five figures that a partnership could owe simply because married owners thought “for richer or poorer” meant when they were in business, too. And a 1065 is only part of the onerous tax paperwork a partnership has to file annually. Is there no way around this? Three little letters The IRS generally considers a business jointly owned and operated by married owners as a partnership for tax purposes, meaning the couple must meet the filing and record-keeping requirements we just mentioned. Plus, married co-owners failing to file properly as a partnership might have been filing a Schedule C, “Profit or Loss From Business,” in just one of their names – meaning only one spouse gets credit for Social Security and Medicare coverage. Unless … they elect to have the business treated as a qualified joint venture. In the eyes of the IRS, a QJV is a joint venture that conducts a trade or business where the only members of the venture are a married couple who file a joint return, who both elect not to be treated as a partnership, and who both spouses materially participate in the trade or business or maintain a farm as a rental business without materially participating (for self-employment tax purposes) in the operation or management of the farm. A QJV includes only businesses that are owned and operated by spouses as co-owners and not in the name of a state law entity, such as a limited partnership or limited liability company. (LLCs can be qualified joint ventures only in community property states; extra tax forms may be involved in these cases, so check with us.) Spouses make the election on a jointly filed tax return, the IRS Form 1040 or 1040-SR by dividing all items of income, gain, loss, deduction, and credit between them in accordance with each spouse’s respective interest in the venture. Each spouse also files their own Schedule C or Schedule F (for farming). Pros and cons for married owners Pros: Easy tax filing is the obvious first one. Partnerships come with a lot of paperwork, such as the 1065 and a Schedule K-1 for each partner and their income, deductions, and so on. QJVs come with no additional forms. Spouses in a qualified joint venture also don’t generally need an Employer Identification Number (EIN). (Check with us if you had EINs already for a partnership.) In fact, the IRS started QJVs more than 15 years ago as a sensible answer to the tax agency’s suspicions that more married business co-owners were letting just one spouse take all the business income and file the Schedule C and Schedule SE (for taxes on self-employed income) just to make paperwork easier. The second major plus: the recognition of self-employment taxes paid. Pre-QJV, only that spouse who reported self-employment income (again, to save on paperwork) got credit for taxes paid and built their Social Security benefits for retirement. Cons: We mentioned that LLCs can’t be QJVs; in the latter, both spouses are sole proprietors in a jointly owned business. That means no shielding business entity between the owners and personal liability for the business. Co-owners in a QJV might also pay more in taxes because they don’t have a corporation’s tax-advantaged structure. For some (though certainly not all) spouses in business partnerships, the QJV can really be a lifesaver. Now,

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Why San Francisco Bay Area Married Owners Might Choose the QJV Route

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