• Clint Login
  • Document
  • Search
Book a consultation

Bay Area Business

Business Growth

Raises and Inflation: San Francisco Bay Area Business Owners, Listen Up

/

Everywhere I turn there’s a San Francisco Bay Area business with a “Now Hiring” sign in the window. Are you seeing this too? Staffing is an issue in every industry across the country.  Part of that? Making money isn’t the only reason people want a job. 2020 certainly shifted priorities. Even if you could throw more money at a phenomenal potential hire, it’s not a guarantee that would be enough to entice them to take the job. What’s been revealed through the Great Resignation is that people are looking for MORE in their workplaces. And when you’re hiring, you need to consider that. Job seekers want flexibility. They want support. They want a working culture that actually cares for them and brings themreal value. And if you’re not making that pivot, you’re in real trouble on the hiring front – maybe even in terms of keeping great employees.  And I do want to talk about how to take care of your employees right now… especially with inflation’s nasty grip squeezing their wallets (and yours). But first, have you thought about how to get your business through a lean year (or a few lean years)? Or have you been thinking about how to raise wages without breaking your bank account? Those are some things we should discuss before it’s too late:Patti (408) 775-7790 Gale 408-775-7800 Now, naturally, when prices are rising everywhere, your employees are going to start coming to you, wondering if you’ll also adjust their pay rate to meet the pressure of inflation. And a good boss will most certainly give raises to employees as they bring value to the company.  So, how do you plan for raises and inflation occurring at the same time? Let’s take a look… Raises and Inflation: San Francisco Bay Area Business Owners, Listen Up“Everything is negotiable. Whether or not the negotiation is easy is another thing.” – Carrie Fisher Rising prices take a double edge to your San Francisco Bay Area business: They tempt you to give your workers lavish raises to keep them happy – or give no raises at all to keep you in business.  Business owners all over the nation say that to cope with rising inflation they’re raising prices or cutting staff. At the same time, they’re bombarded with cash flow struggles, rising production costs, reduced sales and slimmer profit margins, and drops in customer loyalty and satisfaction. What can a small business even afford for raises this year?  Our inflation series continues with a look at what you should think about concerning worker raises and inflation periods.   The up and up Wages are on the rise in a big way. A recent survey from the Conference Board predicts almost a 4% jump in wage costs for companies in 2022, the highest in 14 years. Amid a staffing crunch, one major trucking company is hiking pay by as much as 33%, even for drivers just out of training.  Adjusted for inflation, though, the real value of wages has been on a steady decline for the better part of a year. And wages weren’t great before that, many say, which has helped fuel the Great Resignation. Now gone are the days of the old 1-2% annual bump.  Given inflation, workers expect raises this year – sometimes as much as 10% – or they walk. Again considering inflation, anything less than 5% might actually seem to your employees like a pay cut, the way prices are going. So, you want to do right by your workers, but you’re crunched, too. What can you do about raises and inflation and keep everyone happy?  Your calculations Start with the numbers to plan your raises, as well as what else you have to keep in mind.  For one, wages rose only about 3.3% in the latter part of 2021, but employees who switched jobs saw almost double that increase. Companies that can afford it say they’re looking at 6% bumps across the board with extra for good performance and other incentives.  Of course, giving more to one employee can mean less for everyone else – and that includes signing bonuses paid and expected higher starting salaries for hires. Those are at the expense of your more-senior workers, leaving you in what staffing folks call an “upward pressure” dilemma regarding merit raises (more in a sec about who deserves one of those).  Another factor: Raises compound into the future. Any pay hikes this year will become the base salaries you’ll have to work on for raises in future years for both salaries and percentages of increase (assuming the workers stay with you). Do the math forward. What will you be able to handle down the road?  One strategy is hanging raises on promotions. The latter typically carry a larger percentage raise – 10-15% seems to be the sweet spot – and those only occur occasionally in a worker’s entire time with the business. You won’t be expected to duplicate them every year. You can also try bonuses (Google recently gave out a four-figure one), an incentive that most employees recognize as a one-time event not likely to be repeated regularly in years to come.   Who deserves a raise? Cost of living aside, you’re not in business long before you realize that some folks deserve more money over time than others do, whether because of their function at your company or their work habits or because they’re in such desirable fields as IT, engineering, or finance.  Across all your employees, though, there can be clear signs that somebody needs and deserves a promotion and/or raise before they leave you for greener pastures. Think of it as a smart investment of your money.  Here’s what to look for: Volunteering: They don’t hesitate to do hard work off-hours, either on the job or through professional development. They’re eager to help co-workers – who recognize and appreciate the help – and they show natural leadership.  Questions: They have the professional maturity to ask good ones and about the company in general, not just about their own place in it.  Production: Theirs is way above

Business Growth

Vendor Negotiation Tips for San Francisco Bay Area Business Owners

/

Is your hustle muscle feeling strong right now? I hope so because if your business is going to make it moving forward, it’s going to have to be – at least for somebody on your business team.  This inflationary environment virtually demands it (as does a likely recession — are you planning for it?). Besides juggling all of the economic and cultural changes the last few years have put on your plate, you must set aside time to think about how to adjust for new market forces around your San Francisco Bay Area business. Whether that’s shifting your hiring models, expanding payment methods (ever thought of text message payments?), or striking a deal with your suppliers… well, more on that below. Running a business with long-term success requires you to be nimble. And speaking of long-term success-ion (ahem), have you made plans for the future of your business? Or perhaps you’re feeling unsure about the plan you’ve already made. Either way, succession plans are something we should definitely talk about:(408) 775-7790  Because even when you’re dealing with the here and now of running your business, you still need to be thinking about what lies ahead. But that’s for the future. Let’s come back to THIS moment and talk about one of those nimble moves you can make right now: vendor negotiation… Vendor Negotiation Tips for San Francisco Bay Area Business Owners“Information is a negotiator’s greatest weapon.” – Victor Kiam Small business owners are always looking for a deal – really, who isn’t? And, you’d be hard-pressed to find times when you need a break more than you do now in our present economic situation. Am I right?  So, where can you find one?  One of your first stops on that journey: your suppliers. It might seem like you need them more than they need you – but that’s not entirely true, and with skill and doing a little homework, you can negotiate to get a good deal with them.  That’s why today, we want to continue our inflation series by looking at how you can work with your supplier to get the most you can.  The Wrench in Vendor Negotiation It does appear that in many industries today suppliers hold the cards. Pleading supply chain problems or inflation, they hike their prices up seemingly at will. This also often comes after years of consolidation and larger competitors continuously buying smaller ones – to the detriment and disadvantage of the consumer (just look at the recent nationwide shortage of baby formula). Whatever the reason, your suppliers may have a lot of companies clamoring for their goods right now. That kicks you right in the price point and seems to weaken your time-tested tactics of negotiation.  And what if you don’t negotiate with suppliers but their other customers do? You can wind up with delayed shipments, poorer products or service, and higher prices as your supplier makes up for deals haggled by your competitors. Being Informed Is Key Negotiation is almost always a good idea. It sets the right tone with a new vendor and gets you something for your (supposedly) solid payment history with a long-term supplier.  We say again: Make sure your payment record is good. Or your talks are going to be tough.  First question: Are they giving the best deal? Arm yourself with informed questions, starting with what’s likely your top priority with a vendor: prices. You’ll hurt your deal by initially asking for a price at or below your supplier’s price, so know the figure. Learn all you can about their wholesale costs (which in general have gone up in the past year by almost 11%).  With new vendors especially, ask for references from other customers – they should be willing to offer a few names – and from them, you might well learn not only about prices but other important aspects of working with your suppliers, such as accuracy and timeliness of deliveries, responsiveness, flexibility, and quality of service.  Here are a few good questions you should ask the potential vendor’s  other customers:  Vendor negotiation goes a lot better when you know what you want going in. Set a price in your head before the discussion on what you’re willing to pay – and stick with it. Write down a few other priorities as well. You probably won’t get them all – but aim for the ones you want most, and you’ll have a better chance of landing them.  Think Through Your Talking points Block out time to talk to your supplier when you can keep distractions to a minimum. Match level to level: You’re the owner here, after all, so make sure they’ve got somebody appropriately senior talking to you. Talk to them with patience and respect.  Of course, don’t reveal upfront what you’re willing to compromise on. But what you should reveal is the homework you’ve done on your market’s competitive pricing. In response, expect them to respect your savvy and figure out that you’re a customer in business for the long term.  Always counteroffer, and not just with price. Sweeten the deal with what you can bring to the vendor to get them in front of their key demographics. Doesn’t hurt to consider what you can do for their bottom line.  If you get stonewalled on price? Be flexible regarding how you use this supplier: Offer partial advance payments or talk bundled bulk orders (ask for discounts as percentages and not dollar amounts). If you’ve got different departments using the same supplier and ordering separately, consolidate orders – it tends to save money. Can you partner with another nearby company that uses the same vendor?  It’s not a pleasant vendor negotiation step to think about, but don’t be afraid to threaten to shrink your order – or cancel it completely. This is usually your last card in a negotiation, so be prepared to move on if it doesn’t work.  Remember, the vendor views you the way you view good employees: It’s cheaper to keep what you have than to find new ones. And don’t get mad: Get a better deal.   When staring down the barrel of

Business Growth

Changing Your San Francisco Bay Area Business Structure – A Savings Opportunity?

/

Prepare, prepare, prepare. As a recession is bearing down on us all, figuring out how to prepare for economic downturns is something you should be concerned with in your San Francisco Bay Area business. I know I am. Now, while you and I can’t prepare for every eventuality, we can put systems and plans in place that will help our businesses face the most difficult ones. Like what I’m talking about today… taking a close look at your business structure and seeing if making a change would save you money in the long run. As one example – are you prepared for the possibility of a natural disaster striking your area? Depending on what you do, that can have catastrophic effects on your business. You can come up with a plan. The Small Business Readiness for Resiliency program is a good resource to get you started.  And of course, I’ve been sharing my tips and strategies over the last couple of months in my inflation series, to help you make plans for an even thinner “economic winter.” We can help you prepare in other ways. Starting with your tax situation. There are things you can do now – moves you can (and should) make – to help you save money and get all the deductions you are eligible for in your business. Use this right here (sooner is better than later): (408) 775-7790  Now for the final installment of my inflation series… Changing Your San Francisco Bay Area Business Structure – A Savings Opportunity?“Change before you have to.” – Jack Welch How you organize your operations makes a big difference to your bottom line. The same holds true about structuring your San Francisco Bay Area business. You may have different reasons for changing your company structure, such as an expansion of personnel, products, funding; profitability; or asset protection.  This week our inflation series wraps up with a broad overview of the financial aspects of business entities.  Business structure types One of the first and more variable expenses for a business entity is taxes. Yet the same complex taxes that can save a company and its owner money can also mean more expensive tax prep and setting up your new business structure. On the other hand, the more complex the structure the greater your personal protection against business debt.  Here’s a look at some of the most common entity types and their expenses and potential savings.  Sole Proprietorship. This may be your best path if you like doing most of the work, taking all the chances, and reaping the rewards. This is also the most common type of business entity – almost 30 million of them in the U.S.  Sole proprietors are liable for the company’s liabilities, debt and losses – your personal assets are on the line. You pay the taxes of the company, often through quarterly self-employment tax; your income is also taxed.  These entities are cheap (if not free) to form but obtaining future capital to expand can be harder than with other business structures.  Partnership. You own and operate the business with at least one other person.  There are general partnerships where the company is owned by two or more individuals who run it as partners or co-owners; limited partnerships with at least one general and one limited partner; limited liability partnerships where owners aren’t held personally responsible for the debts or other partners’ actions; and LLC partnerships that can have two or more owners, who are called members and whose personal assets are protected.  Your personal financial liability is diffused; so are your profits. Partnerships must file an annual information return to report the income, deductions, gains, losses, and so on from operations but they don’t pay income tax.  Many in partnerships and other entities can take a 20% tax deduction on their “qualified business income” (QBI) – check with us on this, though, as there are a lot of rules.  Limited Liability Corporation (LLC). An LLC exists as a separate legal entity that protects its members from personal liability for business doings.  Registration costs are generally in the low to mid-three figures, depending on your state. Services are available for you to set up an LLC, too, which are usually quick and reasonably priced. Raising capital can take more work, time, and money than with other entities.  For taxes, a domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it files Form 8832 and elects to be treated as a corporation.  Corporation and S corp. Money and tax considerations get more complex with these entities. (We’re happy to advise further – give us a buzz.)  A corporation is a separate taxpaying entity that can elect to be taxed as a pass-through entity – a “subchapter S election” that requires filing an IRS Form 2553. Other conditions include a limit on the number of shareholders.  S corps pass corporate income, losses, deductions, and credits through to shareholders, who report the “flow-through” of income and losses on their personal tax returns. They also have to pay FICA taxes on salary compensation to owners and not on the remaining profits. The IRS stresses that S corp owner-employees must be paid “reasonable compensation” for their services. Some states also have special rules for S corps.  C corp. Your corporation can also elect to be a C corporation. The owners are taxed only on the amount of earnings they receive as dividends — not the earnings the corporation retains. Owners can sometimes even get out of capital gains taxes when they sell certain stock of the company (on this and all tax matters, check with us).  C corps can be yet another structure to protect assets – and attract investors as well as live under a lower tax rate than S corps. Nevertheless, a recent study found that some startup C corps would have saved money if they’d formed as LLCs.  In a C corp, the company itself is taxed on income and any additional profits left over and distributed to shareholders (usually as

Business Growth

How San Francisco Bay Area Owners Can Have a Productive Business Meeting

/

Ever finished a meeting and thought That could have been an email? Yeah, I get that. Work meetings are one of those necessary evils that too often end up being time wasters rather than savers. But you can’t simply wave a magic wand and eliminate them (though, in certain cases, it might be the dash of cold water you and your San Francisco Bay Area business need).  Some are important as a means of company-wide communication, updates on various projects, strategy sessions, vision casting, connection, etc. So, how do you have a productive meeting AND limit them at the same time? That’s the question I want to take up today. Now, as a reminder, we’re in the 4th quarter and will soon be staring down the barrel of a new year and the inevitable tax compliance (i.e. tax return preparation) season. But you still have time to make moves to get your San Francisco Bay Area business better situated (i.e. tax planning) before the bell. Let’s get something on the books to discuss what that might look like for your San Francisco Bay Area business:Patti  (408) 775-7790 Gale 408-775-7800 But we can also keep the meeting short. Because, well … How San Francisco Bay Area Owners Can Have a Productive Business Meeting“People who enjoy meetings should not be in charge of anything.” – Thomas Sowell  The voices slowly morph into sounding a lot like Charlie Brown’s teacher, your head starts to droop, and your mind begins to liquify into thoughts that have nothing to do with this meeting. Yes, yet another meeting. We’ve become so accustomed to tedious business meetings that we’ve lost all sense that they could, with planning, be – though it does stagger the mind – productive and useful.  How? Let’s all take a seat, and we’ll get started.  Whose time is it, anyway? Meetings, born in corporate culture, have mushroomed. Almost half of business employees have “several” meetings a week (more than one in five people have at least a meeting every day). The average length is 45 minutes. More than a third of business meetings don’t use an agenda. The result: Seven out of 10 employees feel their time is being flat out squandered. Nearly two out of every five respondents admitted falling asleep during meetings.  (Video meetings, booming during the past few years, tend to garner more favorable reviews. Almost nine out of 10 respondents said video conferences sped up work and sharpened attendees’ focus.) Executives say that almost half of meetings serve no purpose – and that two-thirds are just plain failures. When, why, and how big should your business meeting be? You can’t replace meetings totally, nor should you. Often, you have to get coworkers in the same room (or on the same Zoom screen) to swap ideas. But could something have replaced that meeting? A phone call? A fact sheet?  In other words, is the meeting going to help move work forward – or replace work, only giving everyone a sense that something’s getting done?  Experts say meetings should constitute at most a fifth of your work life; too many meetings can simply shatter concentration. And meetings should never be the first go-to for exchanging ideas. If your business has too many meetings, look at who’s calling them. Limit the number of workers who can call a meeting before you create a bunch of time bullies.  Monday is the least popular day to have a meeting. Tuesday and Wednesday are preferred.  A big question: How many people should be at a business meeting? (Your answer might be, “One…”) Size depends on what you have to cover, but as a rule you should think about the minimum needed before you message everyone to schedule a time. Who really needs to hear the points? Who gets invited to all meetings just out of habit? Who’s going to only bog things down? Amazon guru and occasional astronaut Jeff Bezos has his own rule: You should have no more people in your meeting than you can feed with two pizzas.  Stick to the plan Following an agenda can keep everyone on track and cut meeting time significantly. Your agenda needs five basics: the main themes (what are you trying to accomplish here?), talking points, support documents, decisions to be reached, and action items.  Get the supporting docs to attendees beforehand so they have time to digest the info and better prepare their input at the meeting. Generally, schedule a meeting at least two or three days out.  To increase participation in the meeting:  If nobody has any questions toward the close of your meeting, has it been a success? Sure, maybe you covered everything completely and there were absolutely no more dots to connect. More likely, they just couldn’t wait to get out of there …  Are there any questions? There should be, for both the attendees and for the person who ran the show.  For attendees: How did this meeting compare to the last one? Did we hit the goals in the agenda? Did the meeting give you what you need to solve problems that were present before the meeting? For the presenter: Who was distracted? Who did most of the talking? Did the talk shift to irrelevant topics? A small anonymous survey after the meeting might help, too. What worked well? Was there something missing? Have participants summarize the meeting in one word or sentence. This gives you an idea what they’re thinking and if this meeting was worth the time.  There’s no avoiding meetings completely in business – but with a little work you can make them a little more necessary and a little less evil. Now, naturally, this is just a baseline to get you started. You have to figure out what works best for your San Francisco Bay Area business. I am confident you’ll find the way.  And, I’m here to support you as you do. Happy to help, Patti ONeill and Gale Bergado(408) 241-4100ONeill & Bergado

Business Growth, Employee Benefits

Can San Francisco Bay Area Businesses Still Get the Employee Retention Credit?

/

Everybody keeps saying we’re slowly leaving the pandemic behind – and for San Francisco Bay Area businesses, that means that pandemic tax relief is disappearing, too.  But can you still qualify for one of the most popular of the Covid-related federal breaks: the Employee Retention Credit (ERC)? Here’s the deal: you have likely heard from friends or heard aggressive marketing campaigns that are promising the moon. BELIEVE ME when I tell you how the tax professional community has been viewing these companies – it isn’t kindly. And now Congress and the IRS are gathering themselves to bring down the hammer on overly-aggressive claims in this area.  So today I want to separate truth from hype. But if you want to talk more about it one-on-one, let’s get something on the schedule:(408) 775-7790 But let’s dive in, shall we? Can San Francisco Bay Area Businesses Still Get the Employee Retention Credit?“You must pay taxes. But there’s no law that says you gotta leave a tip.” – Ad for Morgan Stanley The Employee Retention Credit (ERC) is gone now, but it might be worth the trouble to retroactively file certain quarterly tax returns and try to get money back. Here’s what you should think about. Running the numbers The ERC was designed to help San Francisco Bay Area employers like you keep employees on the payroll during the tough times of the pandemic. The credit was based on qualifying wages paid to employees and was quarterly-based relief for 2020 and most of 2021.  Generally, to qualify a company had to experience a significant decline in gross receipts, shut down on government orders, or have suffered supply chain disruptions. For tax year 2020, you qualified in any quarter in which your gross receipts were less than half of those in the same quarter in 2019 (with some additional details). For 2021, you could claim the ERC in any quarter in which gross receipts were less than 80% of those in the same quarter in 2019 (or 2020 if your company wasn’t old enough). (Figuring your gross receipts isn’t as simple as just looking back through your books. You may qualify even if you don’t think so at first glance. Reach out to us.) Slightly different versions of the ERC are available depending on your company size. You calculate the amount of ERC using the payroll for full-time employees (and, with some additional math, part-timers, too). Qualified wages were generally gross wages plus employer health insurance costs.  The maximum credit was $5,000 per employee for all of 2020 and $7,000 per quarter per employee for 2021. If you qualified, you could (and still can) claim the ERC for qualified wages you paid in all four quarters of 2020 and in the first three quarters of 2021. “Recovery Startup Businesses” that opened after Feb. 15, 2020, and that had annual gross receipts of less than a million bucks could also claim wages for the last quarter of 2021. The recovery startup ERC limit was 50 grand per quarter; the credit was equal to 70% of qualified wages paid to employees in each quarter. Employee Retention Credit Re-filing You can still amend the IRS Form 941 for the quarters where you now think you qualified. To amend, you need to file Form 941X. Each of your quarterly 941s is considered filed by Tax Day the following April. You have three years from these filing dates to amend previous filings to try for the ERC: Tax Day in April 2024 or April 2025 depending on whether you want to apply for the credit for 2020 or 2021.  You’ll need documentation to prove your decline in gross receipts or to prove that you were subject to a government-ordered pandemic shutdown. Undocumented claims about supply chain disruptions won’t help you get an ERC.   Step right up The ERC changed frequently and has confused a lot of people. For instance, the American Rescue Plan extended the ERC to the end of 2021, although the Infrastructure Bill passed in November 2021 ended the ERC retroactively on Sept. 30, 2021 – but not for Recovery Startup Businesses. Got all that?  Some other points of confusion include…  I heard a guy on the radio tell me he could get me thousands back for the ERC overnight …  Boutique ERC mills have cropped up lately, promising the moon for a cut of your easy credit money. Except:        While I want to equip you with tools and data to take advantage of those tax-reducing deductions like the Employee Retention Credit as long as you can, I also want you to understand the situation fully and have someone on your team that you trust to give it to you straight. That’s one thing you can depend on when you come to me. And I’m happy to help… Helping your San Francisco Bay Area business, Patti ONeill and Gale Bergado(408) 241-4100ONeill & Bergado

Business Tax Planning

Which Bills to Pay First in Your San Francisco Bay Area Business

/

Holiday creep. It’s real. Here we are in early November, and it feels like Christmas decorations and other holiday chicanery have already been upon us. San Francisco Bay Area retailers are buckling in for what looks to be a rough shopping season, given current economic factors… BUT per the U.S. Chamber of Commerce, over 30% of consumers got a head start on their holiday shopping in October. What have you noticed? How is your holiday revenue rhythm looking relative to other years? Would love to get a feel from my own contacts about this. By the way, here’s a good rundown of how big corporations are approaching this season. But back to you, and to us. We can take a look at your cash flow, and pricing structures to help you have a clear picture of where things are at and how to get them holiday season ready. That’s just one of the things we can discuss. Use this: Patti (408) 775-7790  Gale 408-775-7800 So I wanted to offer a quick primer on how to handle things when you’re facing difficult choices about your cash flow including which bills to pay when. And again, if this matches your circumstances, we might should talk. There are probably some things that we could do to help. Which Bills to Pay First in Your San Francisco Bay Area Business“A lot of talented actors still have to pay their bills.” – Mark Wahlberg Sometimes it seems like bills come through the door as much as customers do … And knowing which bills to pay in which specific order can be difficult.  And just like some customers are worth more than others to your small business, some bills need quicker attention than others as well. You put things in priority order for your company every day. You should do the same for your expenses.  We’ve got some thoughts on how to do that.  Which bills to pay first and why You’ve heard about keeping the lights on? It’s true. Whether your business relies on the internet, machinery, handwashing, or heating, your utility bills have to be near the top – if not always first – on your pay list. You also need a place to work – there’s no debate if you arrive at the office one morning and find the door padlocked. Pay your rent.  Now for bills that can have wiggle room (but precious little of it):  A couple notes: Not all debt is created equal. Credit card debt can require a judgment against you for collection – a long process for most creditors. Large bills do more harm to your credit score if they go long overdue.  Your responsibility for debt can vary in severity depending on your business entity. If you have a sole proprietorship or partnership, for instance, you’re personally liable for all your business debts – assets such as your home might be on the line. If your business is a corporation or LLC, you’re only liable for the debts that you personally guaranteed. Collateral on loans is another matter.  Strategies Communication and payment plans can be your best friends when you’re trying to pay off bills.  Utilities. Most utilities are open to the idea of a payment plan, particularly if you’ve paid your bills regularly in the past. Be advised to monitor your energy use going forward and cut back wherever you can (like turning down the heat or not leaving windows open with the air conditioning on).  Is your plan based on your future usage or on an average? Make sure that you aren’t shocked with a huge bill for excess energy use at the expiration of a payment plan.  Taxes.Much as tax authorities have broad powers to seize just about anything, they also have a variety of payment options for tax debt, including installment plans, negotiation tools like a federal offer in compromise (if your debt’s big enough and if you qualify), and avenues to dispute your debt. (We can help you find these.) Rent.Maybe your landlord has a kind heart. Failing that, maybe your area has a rent assistance program for businesses that have fallen on hard times. These exist on the federal but just as often on the state, county, and city level. We can help you find one you qualify for. Payroll. Aside from pay cuts, one of your next options for saving on payroll is layoffs. The savings are quick and obvious, and you may be able to redirect your payroll costs toward new and cheaper or part-time staffers. On the other hand, layoffs can make remaining employees jittery and insecure – and eager to look for a new job. They also open the door to poorer customer service and even discrimination lawsuits.  Finally, what can you cut back on? One possible expense: insurance. Your business may not be able to function without certain coverage, such as professional liability, but missing one premium isn’t likely to torpedo your entire policy. And longer term, rare is the policy price that can’t be improved with negotiation, bundling, or research into cheaper options. Getting your bills paid is an essential part of doing business. And figuring out which bills to pay when is an essential part of your San Francisco Bay Area business’s financial well-being, especially when we approach busy seasons like this one. Every business’s situation is unique, and figuring out what’s right for yours takes some thoughtfulness. If you need a little mental support on that front, we’re right here. You can depend on us, Patti ONeill and Gale Bergado(408) 241-4100ONeill & Bergado

Business Valuation

When a Local San Francisco Bay Area Business Is Shutting Its Doors

/

This might not apply to you. So it could just be something to file away for the future. But I’m hearing enough rumblings from other accountants and seeing some of the signs … SMB owners could be in for a tough ride over the next little while and that could mean any San Francisco Bay Area business could end up shutting its doors. And sure – nobody likes to think about the end of something. Endings are sad and hard. And then there’s the psychology of it all – it’s difficult to think about closing your business when you’ve invested so much of yourself into it.  But sometimes you find yourself there, the math is just the math, and you’re facing the end of an era for your business – whether via disaster or marketplace factors or you’re just ready to move on. So if you’re considering closing your business (for whatever reason), you have to have an exit strategy, especially when it comes to your tax obligations. Because even if you’ve closed out your inventory or notified your employees and sent out those painful final paychecks, there are still things you have to take care of with the IRS. This all seems gloomy – sometimes the exit is a windfall. Let’s plan for THAT and take a look at where you see your business going in the next 5-10 years, and how we can prepare your finances for either eventuality. Use this for that:(408) 775-7790 But regardless, it’s important to know what happens when a business is shutting its doors. Here are some things to keep in mind… When a Local San Francisco Bay Area Business Is Shutting Its Doors“Only those who will risk going too far can possibly find out how far one can go.” – T.S. Eliot  You gave your small business your whole life. But there comes the day when, for whatever reason, your business is shutting its doors. In that emotional moment, taxes and paperwork may be the last thing you want to think about.  We understand. But you’ll do yourself – and those who worked with and for you – a favor if you take the pains to tie all those loose ends.  Let’s look together at what’s involved (from a tax perspective).  Last returns (and payments) Uncle Sam waits for no one; you must file a final tax return for the year in which you close.  What IRS form you need will depend on your former business. For instance, if you ran a limited liability company (LLC), the IRS might have viewed your company as a partnership, a corporation, or some other kind of entity. Partnerships file IRS Form 1065, corporations file Form 1120, sole proprietors file a final Schedule C in their personal return, and so on. You may need additional forms if you sold the business or its property.  If you created your company by state law (a corporation or an LLC, perhaps), you follow state rules to terminate, including filing state returns and paying fees. If you had a C or S corp that resolved or have plans to dissolve the corporation or liquidate any stock, you must file IRS Form 966, “Corporate Dissolution or Liquidation.” If you sell assets that make up the entire trade or business, you report the transaction on Form 8594, “Asset Acquisition Statement.”  Double-check with us about form, schedules, other documents, and the filing deadline. You also must pay taxes due the state or the feds – and remember that even if you close your business right now, much of the payment and other obligations will come next filing season.   Take care of your people You have to pay final wages and compensation to your employees – and that means you also must make final federal tax deposits and report employment taxes. (There’s a penalty if you don’t.) Your quarterly 941 tax return or your annual Form 944 return can cover reporting for your final wage payments. Check the box to tell the IRS your business has closed and enter the date when you paid the final wages. You should also attach a statement to the return showing the name of the person keeping the payroll records and the address where those records will be kept. Also:  If you had a pension or benefit plan for employees, you’ll have to terminate it (and eventually distribute the money). You’ll need to file Form 5500, “Annual Return/Report of Employee Benefit Plan,” and you may want to file Form 5310 for confirmation of the status of your plan – it can save trouble down the road. Closing your EIN The employer identification number (“EIN”) of your business has to be closed out, along with your IRS business account. You close both by sending a letter to the IRS that includes the complete legal name of the business, your EIN, the business address, and the reason you want to close the account.  If you still have it, also send a copy of the notice the IRS sent when you got your EIN. We can get you the right address.  Keep Your Records There’s always a lot of debate about how long to keep tax records. For businesses, it depends on what’s on each document. For instance, keep records of employment taxes for four years. You generally keep property records until the statute of limitations runs out for the year you got rid of the property. We know it’s a lot to think about at what’s probably an emotional time – know that we’re here to help. We’re primed to help you sort through what needs to be done if your business ever ends up shutting its doors. On your team, Patti ONeill and Gale Bergado(408) 241-4100ONeill & Bergado

Business Growth, Business Tax Planning

Our (Early) End of Year Checklist for San Francisco Bay Area Businesses

/

When I think about the holiday season, I think “calm before the storm.” That’s because in my profession, once mid-December hits, we’re scrambling to handle EOY matters. And then when the new year strikes, we’re holding our breath for a few weeks … and then tax season is upon us. We are very “calendar-driven” in the accounting profession. For “normal” San Francisco Bay Area business owners, this season can mean all different kinds of crazy. (But hey — we can still enjoy the smells, like turkeys roasting, cookies baking, and evergreen wreaths). And as you prepare to fill your houses with holiday cheer, and prepare for the crazy, I really am here to help. In my opinion, you need to carve more than just the turkey … you need to carve out some time to examine where things are at in your business and what you still need to get done before the stroke of midnight on December 31st.  Of course, besides the helpful end of year checklist I’m bringing to you today, we can always sit down and do a once-over and find what to prioritize to lighten your tax burden and your other business burdens: Patti (408) 775-7790  Gale 408-775-7800 But, let’s start here. This is a good rundown of what you can still do over the next 6 weeks to get your business in shape and ready for a new year. Our (Early) End of Year Checklist for San Francisco Bay Area Businesses“It does not do to leave a live dragon out of your calculations if you live near one.” – J.R.R. Tolkien The close of the year is a natural time to take stock of all things, and one of them should be your business. Your money – as well as your plans for it – should be top of the list.  From your people to your payroll taxes, budgets to your bank: Though financial assessment can seem to be a big basket, with proper planning you can tick off one item at a time and set yourself up for 2023.  So, let’s take a look at this end of year checklist I like to share with San Francisco Bay Area business owners. End of Year Checklist Category #1: Financials Give a once-over to your key financial documents, such as your balance sheet (assets, liabilities, and shareholder equity), income statement/P&L, and cash flow statement. What to look for:  Balance sheet: Are your receivables and debts in line with total assets? Higher inventories can reflect lower sales, and double-check for contingent liabilities and their due-dates. Income statement: Unexplained drops in sales and marketing expenditures: Do they correlate? If not, look back to see what went wrong. Did operating costs ever rise occasionally without a corresponding rise in revenue? Again, what happened?  Cash flow statement: Operating activities should be your biggest category. Too many big but infrequent payments from just a few clients? Delayed receivables?  Prepare a budget for 2023. Go over your A/R past-dues and look ahead to factor in upcoming capital improvements in addition to regular operating expenses. Check your inventory and pre-pay if possible for items and services such as insurance, professional dues, or rent that you’ll need next year. Use last year’s budget as a guide, but not as an ironclad roadmap: Every year is different. With inflation and ongoing supply-chain messes likely into 2023, it pays to plan and now.  End of Year Checklist Category #2: Third parties Aside from suppliers, two of the biggest outside businesses impacting your company are your bank and your insurer.  Banking: Simply, are you getting all the services you need, such as employee company credit cards? Is your access to your bank sufficient (either through in-person branches or online)? Are fees too high? Are they meeting all your credit needs (including for Small Business Administration loans)? Can you get better support or perks elsewhere?  Insurance: Make sure your policy is renewed and up to date. Looking ahead to 2023 developments that you expect for your small business, do you have coverage for those changes? Need any policy riders? See if bundling coverage will save on premiums.   End of Year Checklist Category #3: Employees Aside from making sure everybody checks the new calendar to slot vacations ASAP, perks and taxes are two big details to check before the new year.  Retirement plans. Review reporting requirements based on the size of your plan and its participant numbers. Some businesses give end-of-year bonuses or retirement contributions to employees, which can come with a tax break.  If you don’t have a retirement plan for workers, look at options for creating one in 2023 – even small companies (100 or fewer employees) can easily set up a SIMPLE (Savings Incentive Match PLan for Employees) IRA. We can help you do this.  Review payroll. Double check with us if you have questions in this area, which frequently changes. Starting next year, for instance, the base annual wage for computing Social Security tax will increase to 160,200 dollars, up from 2022. Did you get any pandemic relief for payroll in the past? Make sure that such credits and loans are wrapped up heading into 2023.  End of Year Checklist Category #4: Operations Tax documents. It’s never too early. Start with the financials we mentioned before and check with us about having to fill out any additional forms: Examples might include W-2s or W-3s; quarterly, state, and federal returns; or IRS Form 1099-NEC – this year, the latter kicks in for just $600 in payments to most independent contractors. Assemble your paperwork for deductions; we’d like to look at it sooner rather than later to get you all the money back that we can.  Debt, income, and expenses. Generally, try to rattle debtors’ cages and get your outstanding A/R by the end of the year – cash in hand always makes bookkeeping easier. There may be times when deferring income into the new year makes tax sense. Ditto for deductible expenses: Taking a major business deduction (for capital equipment, say) can make a big difference for your company’s taxes in one year but

Business Tax Planning

Changes to Your San Francisco Bay Area Business’s Social Security Payroll Taxes

/

Have you recovered from the electoral drama yet? Allow me to quickly remind you: No matter how you’re feeling about these results, what matters MOST is how you operate that which is under YOUR control. And I say that as somebody whose entire work is driven by decisions made by Congress and the IRS. So, let’s keep on trucking towards our goals, and keep this stuff where it belongs – as background noise.  You’ve been faced with a lot of changes the past year… two years – ok, three years. I have to take a second to really commend you on your resilience in these times. As a business owner, being able to take a few hard-landing punches and still stay in the fight takes grit.  And I like to consider myself your ringside coach in this fight. And more than just a little “attaboy,” I’m here to help you strategize and come out with the win in your San Francisco Bay Area business. So as the year hurtles towards its end, that means thinking about the last moves you can make to see those goals you had get checked off your list. Ready to get a little “ringside” chat in? I’m right here: (408) 775-7790 Now, speaking of one of those changes, you may have to help your employees navigate a change that’s coming to social security payroll taxes starting 1/1/2023… And if payroll is something you want us to help you with, drop me a note. Changes to Your San Francisco Bay Area Business’s Social Security Payroll Taxes“It’s not the load that breaks you down, it’s the way you carry it.” – Lou Holtz You may have heard about the recent increases coming to Social Security benefits: the biggest hike in decades. Seems inflation’s getting into everything, including taxes for your employees.  Starting next year, your workers will have to earn more before they’re exempt from having Social Security taxes taken out of their paycheck.  Here’s what to know about the changes to social security payroll taxes.  The up and up Most people have heard by now that Social Security recently gave benefits recipients the biggest cost-of-living adjustment (COLA) since 1981 – good news for a lot of folks fighting inflation. But increases were also reflected in another Social Security formula, this one affecting your San Francisco Bay Area company.  Starting next year, the base annual wage for computing Social Security tax will increase to $160,200 – up from $147,000 for 2022. Wages and self-employment income above this threshold won’t be subject to Social Security tax.  As a reminder, employers, employees, and self-employed workers have to deal with two taxes from the Federal Insurance Contributions Act (FICA): Social Security (aka the old age, survivors, and disability insurance taxes), and Medicare (the “hospital insurance” tax). For almost a century now, FICA has partly funded Social Security programs. Social Security benefits recently bumped with the big COLA are funded from the general tax base, not specifically by FICA payments. Medicare was added to paycheck withholdings in the 1960s.  The Social Security tax has a maximum; the Medicare tax doesn’t.For 2023, the FICA tax rate for employers remains the same as this year: 7.65%, broken down into 6.2% for Social Security and 1.45% for Medicare. That makes your workers’ maximum Social Security tax $9,932.40 for 2023.  If you’re self-employed, your Social Security tax of the full 12.4% on the first $160,200 of SE income translates into a maximum for 2023 of $19,864.80.  Just to review… You withhold a 6.2% Social Security tax from your employees’ wages and you pay an additional 6.2% (your “employer share”) – which combined makes the full 12.4%. You as an employer also withhold a 1.45% Medicare tax from your employee’s wages, and you pay an additional 1.45% employer share for a total of 2.9%.  As an employer, you do not pay a portion of the 0.9% Medicare surtax (aka the Additional Medicare Tax) for your high-earning workers ($200,000, for instance, for an employee who files his or her taxes using the status of Single), though you do withhold this amount when employees hit that pay threshold. And once you begin withholding that surtax, you withhold it every pay period until the end of the calendar year. A few questions about social security payroll taxes Compliance with FICA and employer’s taxes is nothing to fool with. Here are some good questions to ask yourself before the calendar flips. Does one of my employees also have other jobs?Not an uncommon situation these days. You might want to check this with your workers. Each employer must withhold Social Security taxes from that person’s wages even if the combined withholding exceeds the yearly limit. (When they file their tax return the following year, the employee can seek a credit for the extra that was paid in.) What if my employees make tips? Employees who get 20 bucks or more in tips in a calendar month should be reporting them to you the following month. You’re responsible for withholding employee income tax and the employee’s share of FICA taxes and paying the employer’s share. But check with us about the FICA tip credit you might get against the income taxes for FICA taxes paid on certain tip wages.  What’s “Medicare mismatch?” This applies to that 0.9% Medicare withholding for high earners on your staff. You’re obligated to withhold that amount (but again, not pay an equal share) regardless of whether your employee will owe the surtax depending on their filing status and what their spouse makes if they’re married (and, for that matter, whether their spouse also works for your company).  If misunderstood, this can make for over- or under-withholdings.  How do I keep track of the changes? Your payroll software should automatically update a change this significant. Now’s the time for you to make sure, while there’s still some 2022 left. Now changes like these can have you sitting back and wondering what to do to absorb them and work with them.  That’s why I write to you. If you’ve got questions about the changes to social security payroll

Business Tax Planning

The New Congress and Your San Francisco Bay Area Business

/

This time of year means big things for San Francisco Bay Area businesses like yours… and big-red-bow-on-top opportunities thanks to the post-Thanksgiving, pre-Christmas buying euphoria.  Early indicators are that this has been a tepid start to the consumer holiday season, but one consistent thing I’ve observed among my SMB clientele — nothing happens unless you do something to make it happen. One thing that should also be on your radar: Year-end moves that will affect your 2022 tax positions. Whether it’s spending, saving, asset structure, etc … we only have one more month (or so) before the books close.  After 12/31/22 … we’re mostly confined to “historical” work on your tax files. Shall we talk about it?Patti (408) 775-7790  Gale 408-775-7800 But leaving all of that aside, I wanted to help sort through the mucky aftermath of post-election results and offer a clearer picture of what lies ahead for your business as we face a new Congress in Capitol Hill. So let’s dive in. The New Congress and Your San Francisco Bay Area Business“I have come to the conclusion that one useless man is called a disgrace, that two are called a law firm, and that three or more become a Congress.” – John Adams, 1776 The midterm elections are finally over. Now you face the challenge of doing business amid a new potential wave of tax changes — on top of such economic trends as inflation, economic change, and leftover pandemic problems like the supply chain.  What to pay attention to first?  Here are 7 takeaways for you regarding the new congress and their effect on your San Francisco Bay Area business. Coopetition #1 – The lights must stay on. A Republican-controlled House of Representatives and a Democratic-controlled Senate (and of course a Democratic White House, with its veto power) mean that most major tax and economic legislation will likely be logjammed through the coming months, at least until the next national election. Nevertheless, some things will have to be done in the new congress lame-duck session, such as appropriations to keep the government running (never a gimme anymore) and money for such outlays as national defense and disaster funding. Further out, both parties will probably have to set aside big parts of their agendas or somehow learn to work together. Taxes #2 – To repeal or delay? Some business tax breaks and conditions are on the block to be repealed or delayed — and could find their way into year-end extender deals. Among them: computation of Section 163(j) current-year business interest limitation; and phase out of bonus depreciation beginning on January 1. A possible repeal of a tax code change that requires amortization of research and development tax breaks could also pass if Republicans allow Democrats to expand the Child Tax Credit (see below). #3 – IRS funding and more agents. The federal Inflation Reduction Act passed last summer pumps 80 billion dollars to the Internal Revenue Service, which will use part of the money to upgrade technology and hire some 87,000 new agents. Republicans in the House have made an early vow to block that money for the IRS pending more organized oversight on spending.  #4 – R&D tit for tat. A new congress split along party lines may get its first taste of wheel-dealing when Republicans push to reverse, forcing companies to amortize their tax break for research and development (R&D) over five years. If Democrats agree, Republicans might bend on expanding and extending the Child Tax Credit for families.  Some Congressional leaders have said both should pass. Inflation and the economy #5 – Cementing the TCJA. Republicans have brought legislation to the House to make the tax cuts, lower rates, and larger standard deductions of the Tax Cuts and Jobs Act of 2017 permanent. Republicans have also pledged in their “Commitment to America” to battle inflation (now running about 7.7%) and lower the cost of living in part through what they describe as a “pro-growth tax economy.”  The Republicans’ TCJA Permanency Act keeps in place today’s tax rates for individuals and families and preserves the 20% deduction for small businesses. Proponents say that the Act provides tax certainty to facilitate costly investments in items with long productive lives. That in turn, Republicans claim, will help tame inflation by helping supply meet demand. Details remain sketchy right now, though, and President Biden would still have the power of veto with an override vote unlikely from a divided Congress.  #6 – The economy at large. Congress (especially a new Congress) can’t directly do much about inflation; the Federal Reserve has the best tools, in the form of interest rates. About the most Congress can do is put more money in the pockets of Americans through tax breaks and stimulus payments. If one party was squarely in control, the path might be clearer. As it is, we are likely to see the push/pull of Democrats advocating stimulus and individual credits and Republicans pushing for tax cuts for business. Capitol Hill does continue to try to attack supply chain problems, most recently with the Ocean Shipping Reform Act of 2022. The new law has had questionable effectiveness so far, but at least it was bipartisan — so there’s hope Congress will do more for the supply chain. Across the great divide #7 – One bipartisan bright spot for the lame-duck session. The EARN Act, related to SECURE 2.0 and one of the flurry of bipartisan legislation aimed at retirement savings, would make several changes to employer-matching contributions to various retirement plans. You’d be able to match employee contributions on a Roth on an after-tax basis, for instance, or contribute more for SIMPLE IRAs and SIMPLE 401(k) plans, among other changes. It would also make it easier for part-time workers to participate in retirement plans.  (Other changes would be an expanded saver’s credit for low and middle-income workers, easier withdrawal penalties, and a higher age for taking required minimum distributions).  EARN (or something like it) stands an excellent chance of passing even this Congress. Nothing ever stays the same for your business or

You have been successfully Subscribed! Ops! Something went wrong, please try again.
Facebook-f Instagram X-twitter
Facebook-f Instagram X-twitter

Business Services

Blogs

Individual Services

About Us

Contact Us

Snap Advisory Inc

6830 Via del Oro Ste 220 San Jose, CA 95119

Get Directions

(408) 241-4100

Contact Details

  • (408) 241-4100
  • Example@gmail.com
  • Snap Advisory Inc 6830 Via del Oro Ste 220 San Jose, CA 95119

Our Most Requested Services

Business Services

Individual Services

Quick Links

Home

About Us

Blogs

Importaint Link

Schedule Appointment

© 2025 Snap Advisory IncAll rights reserved.

Scroll to Top