hundley-advisors

Is the Work Opportunity Tax Credit Right For Your Chester NJ Business?

Sat, 28 Dec 2024 09:04:23 GMT

Raise your hand if you feel like you’re living through a sales tax nightmare as we’re in the post-Black Friday and pre-Christmas window of chaos. (While I can’t see your raised hand, I can certainly feel it.)

Which only makes sense: You have to pay attention to a lot of details, all while handling an atypical volume of sales. Stress and mistakes are inevitable. And If that’s where you’re at, my and I are here to offer relief… calendly.com/ethan-hundleyadv

Or, if you prefer more of a hands-on approach, you might look into the IRS’s Business Tax Account (BTA). It’s a handy digital service meant to help you keep your tax obligations met – you can look at your balances due, your payment history, make electronic payments, and a lot more.

In the IRS’s opinion, the BTA is the way to go for every business owner. But if you’ve read many (or even a few) of my writings, you already know – there’s never a one-size-fits-all solution when it comes to taxes.

So, if you need tax help with a personal touch, you know a reliable Chester NJ tax pro you can call to help you out (ahem).

And if you’ve been keeping up with my writings lately, you’re probably pretty familiar with the end-of-year tax moves you should be making. Because up until now, the 2024 finish line was the issue at large.

And that’s still true – but it’s now time to start thinking ahead to a tax-smarter 2025 (and what credits you can take advantage of – which of course, I’ll be your guide to).

Today I’m sharing more about the Work Opportunity Tax Credit (WOTC). This one is a strong potential for you if you have a passion for making an impact bigger than yourself.

Is the Work Opportunity Tax Credit Right For Your Chester NJ Business?

“Someone is sitting in the shade today because someone planted a tree a long time ago.” – Warren Buffett

Running a business is about more than cash flow and bottom lines, as you well know.

Beyond financial success, one of the things that makes running your Northern NJ business worthwhile is the way you invest in others – especially in those you hire. You’re uniquely positioned to make a lasting impact on their careers and their lives.

And, the government has deductions and credits that you can sometimes claim for that kind of care, such as The Work Opportunity Tax Credit (WOTC) – which I want to talk more about today – along with some others (which I’ll discuss more in the coming months).

As far as the WOTC goes, if you bring individuals onto your team who typically struggle to get jobs – like veterans, ex-felons, or recipients of government assistance, as examples – the IRS offers you a little kickback in your tax burden.

But of course, hiring these individuals is about so much more than the tax boost. The REAL benefit is seeing their lives changed for the better as you offer them growth opportunities that others won’t. It’s about how your business can make an impact that really lasts.

What is the Work Opportunity Tax Credit (WOTC)?

The WOTC is a dollar-for-dollar tax credit for hiring individuals from certain groups that the IRS specifies. As of right now, the credit is good for the taking until the end of 2025 (although the historical pattern of Congress has been to extend it when it’s close to expiring).

How much you’ll get from the credit varies – it depends on the target group of the employee, their qualified wages, and how many hours they work (and is calculated by a percentage determined by these factors).

It ranges from a 1.2k boost for summer youth employees to 9.6k for veterans with a service-related disability who are unemployed for 6+ months.

Who are the target groups?

To get the credit, consider hiring individuals who fall into these categories:

Veterans receiving government assistance or with service-connected disabilities.
Long-term unemployed (for 27 weeks or longer and receiving unemployment benefits).
Recipients of certain government programs such as Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), or Supplemental Security Income (SSI).
Designated community residents aged 18-39 living in Empowerment Zones or Rural Renewal Counties.
Vocational rehabilitation referrals in vocational rehabilitation programs.
Ex-felons hired within a year after conviction or release from prison.
Summer youth employees living in Empowerment Zones.

So, here’s what you need to do to get the Work Opportunity Tax Credit next year:

Find qualified applicants. Your State Workforce Agency (SWA) or local unemployment office can typically help with this.
Complete pre-screening requirements. Make sure to complete Form 8850 (which is the pre-screening request for the WOTC credit) and ETA 9061 within 28 days of their start date. (Or, if the applicant has a conditional certification, ETA Form 9062 )
Track the employee’s hours and wages. To qualify for the WOTC, they must clock at least 120 hours in their first year of employment.
Do the math and claim the credit. Calculate the percentage of first-year wages you can claim with Form 5884 , then transfer that amount to Form 3800 , and attach both to your federal income tax return (hey, I never said the paperwork would be easy).

And of course, you’ll need to practice good recordkeeping habits throughout the process (to help keep potential audits at bay): Keep track of any and all submitted forms, employee certifications, and records of wages and hours worked.

Is the credit right for YOU?

But before making plans to take advantage of the WOTC, here are a few important questions to ask yourself:

What’s your current tax liability? The Work Opportunity Tax Credit is nonrefundable – so if the credit ends up being more than your income tax bill, you won’t see that money back (or you’ll need to rely on carrybacks or carryforwards to not lose it).

Do you have the bandwidth? The paperwork for the WOTC process is demanding (of course, my team and I are happy to help ease that burden for you).

Could other credits be more advantageous? Wages used to calculate the WOTC can’t be used for other tax credits (like the Employee Retention Credit or the Paid Family and Medical Leave Credit, for example), so this credit could actually hold you back from getting other (potentially better) benefits.

If you conclude the WOTC isn’t right for you, don’t fret – there are many other tax credits to consider for 2025 (which I’ll be clueing you in on in the coming weeks and months). You can also consider…

The Small Business Tax Healthcare Credit: Providing health insurance to your employees = up to 50 percent of the premiums paid.
Credit for Small Employer Pension Plan Startup Costs: Great for you as a business owner looking to inspire retirement savings habits.
Research and Development (R&D) Tax Credit: If you’ve got a curious streak, use it to help offset your income tax liability.
Inflation Reduction Act (IRA) Clean Energy Credits: Going green could be a tax-savvy move for you in 2025.

…and many others. Take these into account as you begin vision-casting for 2025: How can the credits the IRS offers align with your needs and passions as a business owner?

It can be hard to know for sure which tax credits are worth pursuing… and which ones might not be the right fit for YOUR business. That’s why I’m here. Let’s schedule a chat for some customized tax-credit direction:

calendly.com/ethan-hundleyadv

To a budget-strengthened new year,

Ethan Hundley

Beneficial Ownership Information: Updates for Chester NJ Business Owners

Fri, 27 Dec 2024 15:12:18 GMT

We’re living in a historical moment: Procrastinating might have just worked to your advantage. While it goes against everything within me (and everything I encourage you toward in my writings), I’m handing you procrastinators the win today.

Congratulations. Just try not to let this become a habit.

I discussed the basics of BOI reporting in a previous writing this year – which covered the details you needed to know to avoid frightening non-compliance penalties. Up until last week, the Financial Crimes Enforcement Network (FinCEN) was poised to penalize procrastinating business owners who failed to file by January 1st, 2025.

But, this is legislation we’re talking about – and the government is nothing if not fickle.

As of last week , the entire BOI reporting situation has been flipped on its head. And if you hadn’t yet filed, you’ve saved yourself some time and effort (temporarily, at minimum; permanently, at best).

For the rest of you, this is my digital pat on the back for being proactive. And my reassurance that your effort wasn’t in vain – this decision is expected to be repealed (if or when that happens, you’ll be the one gloating over the procrastinators. We’ll be sure to let you know when the moment comes).

So, regardless of FinCEN’s finicky behavior, the bottom line is this: You still need to be prepared to comply with BOI reporting requirements for your Chester NJ business.

Beneficial Ownership Information: Updates for Chester NJ Business Owners

“Take complete ownership of your outcomes by holding no one but yourself accountable.” – Gary W. Keller

Beneficial ownership information (BOI) reporting feels like a big (confusing) bowl of alphabet soup right now if you’re a business owner. If you don’t know what I’m talking about (and statistics show that only about 20 percent of you have a clue), then let me help you out.

The Corporate Transparency Act or CTA (passed in 2021) enacted a requirement for all businesses with beneficial ownership to report identifying information for each beneficial owner to the Financial Crimes Enforcement Network (FinCEN) — and that requirement went into effect on January 1, 2024.

Now, the real question you have to ask yourself is this: “Does BOI reporting affect my business?”

Unfortunately, there’s no short answer to that question. Up until a few days ago, you would be dealing with a nasty penalty (591 dollars per day at best, or imprisonment and criminal fines up to 10k at worst) if you failed to file by January 1st, 2025.

But on December 3rd, the CTA was declared unconstitutional – meaning, the fast-approaching deadline isn’t an issue, for the time being. So, let me get you up to speed on everything you now need to know about BOI reporting.

Refresher: What is BOI reporting?

(Skip this section if you know all of this already.)

Certain businesses have to disclose information (like names, addresses, identification documents, etc.) of people who have ownership in the company – those who own at least 25 percent of the company or have significant decision-making power —to FinCEN.

Why? Well, the argument is that it helps combat financial crimes… money laundering, tax evasion, fraud, and other nefarious activities because shell companies and other opaque structures are used to hide the true ownership of assets. BOI reporting is meant to help eliminate this anonymity. (The jury’s out on whether or not these regulations will actually help with this.)

The businesses usually in the hot seat are LLCs, corporations, S corporations, limited partnerships, limited liability partnerships, and business trusts (and if you’re up for some light reading, FinCEN has a detailed list of exempt entities).

What’s the current BOI situation?

On December 3rd, the U.S. District Court for the Eastern District of Texas flipped BOI reporting on its head – the Corporate Transparency Act (CTA) reporting requirements are now put on hold, nationwide.

This decision, Texas Top Cop Shop v. Garland (E.D. Tex.; 12/24) , goes even further than an earlier Alabama ruling on the same issue. While FinCEN clarified that the Alabama case applied only to the parties involved in that litigation, this Texas court made it clear: its ruling applies to all entities nationwide.

The court found that both the statute itself and its final implementing rule are likely unconstitutional. The reasoning? The CTA exceeds Congress’s authority under the Constitution – undermining their initial effort toward transparency.

So, that January 1, 2025 deadline you were sweating (or not if you were still “blissfully” ignorant)? Gone, at least for now. However – legal challenges like this often evolve, and compliance could still become a reality later on. For now, here’s what you should focus on:

If you already filed… you’ll want to keep your beneficial ownership information records handy. If the injunction gets overturned or new rules drop, you’ll want to be ready to pivot without scrambling for paperwork.

If you haven’t filed yet… don’t get too comfy now. This legal drama could flip at any moment, so get your BOI reporting documents in order, just in case: The full legal name, date of birth, residential address, and an identification document with a unique identification number for each beneficial owner (FinCEN’s BOI Reporting Rule Fact Sheet can help guide you here).

And regardless of whether or not you already filed, stay in the loop. Keep tabs on appeals or new rulings from FinCEN or the IRS that could change compliant requirements (and put those terrifying penalties back into effect).

This ruling might give you a breather, but the beneficial ownership information drama is far from over. Use this time wisely to stay ahead of the curve—and to ready yourself for whatever comes next.

And if you’ve got BOI concerns you need to get off your chest, my team and I are here for you – because I want to see your Northern NJ business stay fully BOI-compliant in 2025.

calendly.com/ethan-hundleyadv

Keeping you in the know,

Ethan Hundley

Growing Revenue in Your Chester NJ Business Starts with Your Team

Fri, 27 Dec 2024 15:12:17 GMT

As you’re knee-deep in business holiday chaos right now, look no further than Santa for inspiration.

Because if Mr. Claus can upgrade his delivery systems to handle millions of gifts in one night (at least that’s what Red One suggests), you can upgrade your Northern NJ business game a little bit too (even without a team of reindeer to help you out).

So if you haven’t adapted your systems to incorporate at least some of the newest AI tech yet, let this be the nudge to get you started. AI is an extremely powerful tool to speed up your team’s processes – which ultimately means more revenue for your business.

Don’t know where to even begin with AI? There are plenty of online resources to learn from (example: AI for Small Businesses ) and workshops (here’s a free one from Google) designed specifically to help business owners like you learn how to incorporate AI tools into their day-to-day processes.

Or, you might lean on your Gen Z workers more. Technology like this can be a bit harder to adapt to if you’re over 50, but the younger crowd has grown up with it. Now, almost all Gen Z workers are using AI tools pretty much every day in the workplace — and regular life.

In the same way that Gen Z-ers can be an asset in the tech realm, every one of your team members (regardless of generation, ethnicity, age, etc.) brings a unique advantage to your team.

Because in your business, it’s actually not YOU achieving your goals – it’s your team. Which is why you need to know how to effectively align your team toward those goals.

Growing Revenue in Your Chester NJ Business Starts with Your Team

A single leaf working alone provides no shade.” – Chuck Page

Take a moment to reflect: In 2024, have you found yourself chasing business growth ideas that didn’t really pay off? Maybe you’ve gotten carried away with new marketing tricks or flashy tools that promise quick success. You wouldn’t be alone.

The reality is, there are only two principles you need to focus on to see your business grow: Taking care of your customers and growing revenue.

It really is that simple. When you put these evergreen principles first, the rest tends to take care of itself (regardless of what the trendy business gurus say).

But try as you may, you can’t shoulder the effort solely on your own. Your whole team needs to be actively contributing to those two principles in everything they do.

What does that look like? Your team should primarily be focused on…

– Getting more customers. Focus on expanding your client base. Encourage your team to brainstorm and implement innovative marketing strategies, leverage referral programs, and optimize sales funnels.

– Keeping those customers. Happy customers tend to stick around. So, it’s worthwhile to invest in quality customer service and loyalty programs (Did you know retaining customers is five times cheaper than acquiring new ones?).

– Increasing the amount of each transaction. Train your team to identify opportunities to upsell or cross-sell.

– Controlling expenses. This looks like establishing a culture of efficiency and resourcefulness – because revenue growth means little if you can’t keep costs under control.

– Getting more referrals. Happy customers will likely spread the word about your business naturally. So, ensuring client satisfaction can go a long way.

– Getting good online reviews. Because 99.5 percent of consumers read online reviews before purchasing, you can’t afford not to have a reservoir of good online reviews.

– Making operations more efficient. Streamline workflows and eliminate bottlenecks (this is where technology and automation can majorly free up your team to focus on what’s really important).

But before practical tasks come into play, you need to establish a revenue-centric culture within your team. This builds a mindset of growing revenue (which helps your team get more on board with your goals).

Make it a point to regularly discuss the tasks mentioned above, and keep the conversation alive by…

Asking every team member to trace how their role ties back to the ultimate goals of revenue growth or expense control.
Asking team members what’s making their job difficult, and what would help them better achieve those ultimate goals.
Asking for input – ask each team member for their ideas on how to streamline each of the processes listed above.

You can’t carry the weight of growing revenue and keeping customers happy alone. You need your team behind you – with every team member clearly seeing how they contribute. Because when your team is aligned and engaged, growth becomes a shared victory.

And, if you’d like another person on your Chester NJ team in the area of accounting or bookkeeping, just grab a time to chat here:

calendly.com/ethan-hundleyadv

To rallying your team,

Ethan Hundley

A Year-End Accounting Checklist for Your Chester NJ Business

Fri, 27 Dec 2024 15:12:15 GMT

Black Friday may be for big corporations but small business Saturday might be for your Chester NJ business. Are you taking advantage of it?

I think in this environment of so much broken trust, a small business — like yours perhaps? — can steal market share by being authentic and full of integrity. So you have a true opportunity.

But we can ride the Black Friday coattails and remember that customers will absolutely look for deals this time of year. After all, everything is a lot more expensive than before (despite the Fed saying inflation is cooling).

But deals and discounts aren’t everything.

People ARE willing to invest in businesses they believe in, but they can’t if they never find out about you. Do Chester NJ people know what you’re all about?

If not, that’s something you want to prioritize. There’s still time this week to do it. The U.S. Chamber of Commerce even has this “toolkit” to help you get started.

Because doing even just a little promotion and talking about it on socials, in email blasts, and even by word of mouth will put it on people’s radar. While you can’t make the “horses drink” you can lead them to the good water (aka your business). If you don’t, they’ll find the closest watering hole every time.

We’ve got more to say about that if you want some outside insight. Or if you just want some professional guidance on bookkeeping, accounting, or any other business financial decision, don’t hesitate to reach out:

calendly.com/ethan-hundleyadv

But, with regard to your books, I’d like to start that conversation right here today. We’re in the last month of 2024 and there are year-end accounting things to get done before it’s over. Let me show you.

A Year-End Accounting Checklist for Your Chester NJ Business
“Opportunity is missed by most people because it is dressed in overalls and looks like work.” –Thomas Edison

EOY is closing in quickly – which means you’re probably juggling too many year-end priorities for your business. Hopefully, bookkeeping is somewhere near the top of your list.

Because even seemingly minor bookkeeping mistakes from this year that sneak into 2025 unnoticed can mean significant tax penalties when filing season arrives and can result in skewed budgeting and cash flow problems.

You want to close the books in 2024 with a clear conscience, and a solid grasp of your business’s financial standing – so you’re in the best position to have a financially healthy 2025.

So, here’s a short bookkeeping checklist to help you during your year-end accounting process:

1. Gather Your Financial Records

You’ll want to start with the big three – your income statement, balance sheet, and cash flow statement.

Overall, you’re checking for the accuracy of your records by 1) making sure all income streams match your invoices and are properly categorized, 2) making sure expenses are categorized correctly and are supported by receipts or documentation, and 3) identifying any overlooked deductions (like mileage or equipment depreciation, for instance).

2. Reconcile Your Bank Accounts

Start by gathering your bank statements for all your business accounts (including credit cards and loans) for the year. Then pull out your general ledger or bookkeeping software for comparison.

You’ll want to check that…

Your opening and closing balances for the year match.
Every deposit, withdrawal, and transfer matches your records.
Items to be reconciled (outstanding checks or deposits) are clear in the next statement period.
Any duplicate or missing entries, or transposed numbers, are adjusted in your records in the correct category. (Or, if it’s a problem on the bank’s side, give them a ring as soon as you can.)

3. Get Payroll Records in Order

Make sure everything is squared away with your payroll records by comparing them with your general ledger and bank statements. Check that wages, taxes withheld, and benefits all match up (and that all payroll tax deposits have been reported, either on Form 941 for quarterly or Form 944 for annual).

If you find something’s amiss, you’ll need to file adjustments with the IRS through Form 941-X ASAP.

Then, get a head start on prepping employee tax forms (which have to be distributed by January 31). You’ll use Forms W-2 and W-3 for employees, and Form 1099-NEC for contractors or freelancers. (And if all these IRS forms have your head spinning, my door is always open for a chat: calendly.com/ethan-hundleyadv ).

4. Review Payables and Receivables

Now, if you use an accrual accounting system: You need to review your payables (outstanding bills sent to you) and receivables (outstanding invoices you’ve sent out) to see if you need to settle any missing invoices during this year-end accounting process.

For receivables – you’ll want to run an aging report (a tool most accounting softwares offer to keep track of invoices and amounts owed) to find overdue invoices. Contact these customers who have yet to pay as soon as possible, because uncollected receivables can still count as taxable income.

And be sure to cross-check your accounts receivable ledger with your income records for any missing payments.

Then, for payables: Run an aging report to get an overview of your unpaid bills, and figure out which ones you need to pay first to avoid penalties and fees. Check vendor statements to make sure all your bills are recorded, accrue for outstanding expenses (like utilities or services performed), and make sure any recurring payments are recorded for the full year.

Now, this is just a basic checklist to help you in the midst of the year-end accounting mayhem you’re probably feeling. Believe me – double-checking your records in these areas will go a long way in setting you up for an easy tax season next year (and helping you achieve your 2025 financial goals).

Want to talk more about how year-end bookkeeping can start your Northern NJ business off on the right footing next year? Grab a time on my calendar:

calendly.com/ethan-hundleyadv

To better financial groundwork,

Ethan Hundley

Business Taxes 2025 In Your Chester NJ Business Under Trump

Fri, 29 Nov 2024 09:07:11 GMT

It’s nice to know that, in the midst of so much division, Americans can still rally together around something – even if it’s just boxing. Over 60 million households Netflix-streamed the boxing match between Jake Paul and Mike Tyson that took place over the weekend.

Did you watch?

Spoiler alert – Tyson didn’t come out on top. But he wasn’t the only one. Netflix didn’t put on a winning performance either. More than 500 thousand streaming problem reports came in throughout the fight, according to Downdetector.

Now, there’s a lesson to be learned here: Netflix’s failure was that they weren’t prepared to handle this insane demand. And they struggled massively because of it.

I think we would all be wise to take Netflix’s example as a reminder to be prepared for uncertain outcomes. Especially now, with a new Commander in Chief coming to the White House, making our economic future even more unknown.

As you well know, shifts in the White House and Congress come with numerous economic and tax-related changes, which you as the further-down-the-totem-pole business owner have to navigate for your business. Change and uncertainty are familiar companions these past few years, aren’t they?

But, because of that, you need to be nimble in your positioning and plans. And I’m here to help you. My aim today is simple: Offer your Chester NJ business clarity with this presidential transition.

Business Taxes 2025 In Your Chester NJ Business Under Trump

“The only limit to our realization of tomorrow will be our doubts of today.” –Franklin D. Roosevelt

Whatever you feel about America’s new president, knowing what to expect and plan for financially (specifically with 2025 business taxes) with a Trump administration is necessary.

Let’s look at how that all breaks down:

The TCJA sunrise? The most pressing tax issue for Trump to settle is the expiring Tax Cuts and Jobs Act (TCJA) provisions. He’s indicated making the expiring provisions permanent.

One in particular could have a significant impact on your business: the Qualified Business Income (QBI) deduction. Extending it would mean owners of pass-through businesses (sole proprietorships, partnerships, LLCs, and S corporations) would get a 20 percent business income deduction. If it stays, your 2025 taxes (and beyond) will continue to benefit.

No more SALT cap. As part of the TCJA, Trump set the state and local tax (SALT) deduction limit at 10k (for married couples as well as individuals – married couples filing jointly don’t get a higher deduction limit).

This cap has been a headache for business owners who report income on their individual tax returns (pass-through business owners as previously mentioned), and many states have taken action since then to let business owners bypass the cap.

Trump is proposing scrapping the 10k limit altogether. But if he does, you’d still have to deal with SALT tax limits at the state level. Certain states might adjust tax rates or phase out certain credits and deductions if they rely heavily on high-income taxpayers.

Down with corporate taxes. During Trump’s campaign, he proposed dropping the federal corporate tax rate from 21 percent down to 20 percent. And, he proposed a special rate of 15 percent for businesses that strictly make products in the U.S.

Raising the bonus depreciation rate. I talked about this in last week’s note, so I’ll be brief. Trump is proposing raising the annually decreasing bonus depreciation deduction rate back up to 100 percent permanently.

This would be a huge benefit for you if you own your building – the government would permanently expense certain qualifying business purchases (facility renovations, technology upgrades, etc.).

Raising the R&D tax credit. Under the TCJA, the R&D credit provides dollar-for-dollar tax credits for businesses that do certain research and development activities (like product experimentation or testing technology).

Currently, the credit is 20 percent of the qualified research expenses you’ve incurred over the year over a base amount (I don’t want to get into the weeds here, but if you’re curious about whether your business could benefit from this, let’s chat).

Similar to the bonus depreciation deduction, Trump is proposing permanently letting U.S.-based manufacturers write off 100 percent of the cost of heavy machinery and other equipment in the first year.

Upping tariffs. During his campaign, Trump proposed raising tariffs on Chinese goods to 60 percent — which could force you to search for ways to absorb or offset the higher costs of imported goods, potentially through pricing adjustments or sourcing alternative suppliers.

No more taxes on tips or overtime . Trump’s proposal to no longer tax tips or overtime income is great news for employees, but it could make life difficult for you as a business owner.

If you employ a significant number of tipped workers, you would need to increase wages to compensate for the loss of tip revenue (which could lead to higher labor costs). Also, payroll systems would become complicated, and there could be a higher risk of fraudulent claims for overtime hours or tips.

Now, a few reminders here (for the sake of perspective): Trump made a lot of campaign promises that, realistically, may prove difficult to put in place by the time you’re filing your 2025 business taxes. And even though a Republican-controlled Senate and a Republican-majority House will remove lots of obstacles, Congress still decides the legislative path his proposals will take.

These proposals are simply potential future tax legislation changes to be aware of. So, as we’re waiting to see how these proposals play out, here’s what you can do to prepare:

Look over your tax strategy. Find out how these proposals would uniquely impact you (we can offer insight here). Plan ahead for maximizing the possible tax savings opportunities in the near future (for example, if the bonus depreciation or the R&D credit rates get raised).
Plan for the worst. There’s always the possibility that tax legislation doesn’t go the way you hope it will. Trump’s increased tariff proposals, specifically, could put a strain on your cash flow. Focus on building up extra cash now, just in case.
Go domestic. If you can, find ways to avoid tariff consequences. Transition to U.S.-based suppliers and make sure your business isn’t dependent on too many internationally imported goods, where possible.

Yes, the new Trump administration adds a layer of complexity to your planning for your 2025 business taxes. Even though logistics are still TBD, the time to plan for these shifts is now. Let’s chat about just how you should go about that for your Northern NJ business.

calendly.com/ethan-hundleyadv

Keeping you in the know,

Ethan Hundley

Bonus Property Depreciation: Big Tax Savings for Chester NJ Business Owners

Fri, 22 Nov 2024 09:06:43 GMT

Pause and take a collective exhale with me…

The presidential election is behind us. Now that the chaos is over, we can focus on what’s ahead. I’d suggest taking a little sage advice from those t-shirts we had in 2010 – “Keep Calm, and Carry On.”

With a new president in office, there are going to be plenty of tax legislation changes in the near future – those Trump proposed in his campaign and those he didn’t. Because as we all know, campaign promises don’t always play out as we expect.

For right now, I’d be looking ahead at the possible state and local tax (SALT) limitation changes . SALT limitations are a hot topic right now because the current 10k cap creates a penalty for couples filing jointly. Many are calling either for a raise of the limit up to 20k for this tax situation—or for scrapping the limit entirely.

As with many tax things, I’ll keep you updated on which way this one ends up going.

Another big tax change possibly on the horizon is the raise of the bonus depreciation rate . Trump is talking about bringing the deduction rate back up to 100 percent – which would be great news for you as a business owner. It would mean enormous tax savings on expenses like new equipment or facility upgrades.

But that’s further down the line. Right now, focus on taking advantage of the current bonus depreciation rate (60 percent) as much as you can before the year is up . Because, unless Trump intervenes (which isn’t certain), the depreciation rate is going to drop significantly with the new year.

Please hear me when I say: Don’t procrastinate. Take action. As the trusted Chester NJ tax pro in your corner, I want you to experience as much of this benefit as you can.

Let’s jump into just how to do that…

Bonus Property Depreciation: Big Tax Savings for Chester NJ Business Owners

“Nothing is more expensive than a missed opportunity.” – H. Jackson Brown Jr.

As a business owner, it’s up to you to make the decisions that bring your business growth – like when to expand your services, upgrade your equipment, or even consider opening a new location. I want to submit to you that, because of tax provisions around property depreciation and a particular one right now known as bonus depreciation, the time to make those changes may be now.

Basically, bonus depreciation is a way to deduct a significant percentage of the cost of certain business expenses, like renovations or equipment upgrades.

But unfortunately, the deduction rate is phasing out, and in 2027 will rest at 0 percent (more on that later). So, you can probably guess the imperative here – take advantage of bonus depreciation for this year’s tax filing.

Every move you make to take advantage of this means… More resources available for you to invest in your business’s growth next year. So, here’s your little guide on how to take advantage of this particular property depreciation rate before the end of the year.

What’s the bonus? Just how much gets deducted? Ask the TCJA. Back in 2017, the TCJA set a 100 percent write-off limit for the cost of eligible assets for business owners (a huge jump from the former rate of 50 percent). But it was too good to last and ended in December of 2022. The rate has been dropping by 20 percent each year since then.

In 2024, the rate is 60 percent and will continue dropping by 20 percent each year until 2027 when it will phase out completely.

So, if you want to take advantage of it now (before it drops to zero percent), here’s a quick list of items to tackle before 2025 to take advantage of that 60 percent deduction rate:

Knocking out business renovations like HVAC systems or lighting (these are considered Qualified Improvement Property [QIP] and have a 15-year recovery period requirement as long as the QIP was placed in service after Sept. 27, 2017, and does not include structural improvements).
Getting new equipment.
Expanding or upgrading your facility (but note that structural additions or external modifications usually don’t qualify).
Investing in furnishings or fixtures.
Opening a new location.
Modernizing your business operations (like finally updating your outdated software programs).

Basically, to qualify for bonus depreciation, assets (new or used) must have a recovery period of 20 years or less. But new assets need to be placed in service during the year you want to claim the deduction.

So, let’s say you decide to go for that flooring upgrade and put in an elegant maple hardwood. If you purchased and installed it this year for 5k, you’d multiply that by 60 percent, which equals a 3k deduction. Then, you’d report that deduction on IRS Form 4562 . (Note: Flooring upgrades that are part of structural improvements may not qualify unless they meet specific criteria (e.g., they fall under QIP for a non-residential building and are interior-only improvements)).

Your window to take advantage of the bonus depreciation deduction rate is short. So, my encouragement to my Northern NJ business clients is to make the most of it before it drops. The time to act is now. Let’s talk how property depreciation and bonus depreciation can work to your advantage before 2024 is up:

calendly.com/ethan-hundleyadv

Carpe diem,

Ethan Hundley

ERM Strategies & Managing Risk for Your Chester NJ Business

Thu, 14 Nov 2024 09:06:09 GMT

As I write this, election day is only hours away. I would tell you to remember to get out and vote, but, by the time you read this, you most likely have already checked that box (or, more accurately, colored in that circle). Stats are showing nearly half of those who voted in 2020 have already voted early.

If you’re nervous about what could happen tomorrow, that’s understandable – you’re not just voting as an individual, but also as a business owner. And because you’ve got more at stake, the outcome hits you harder.

Election chaos can be distracting. But, for the sake of your Northern NJ business, it’s important for you to keep your mind on the things that you can impact. Care for your employees, lead your team with strength, and figure out how to provide the best service and products to your customer base.

There are a few other financial housekeeping things you could take care of to keep your business well-primed post-election:

Consider building up your cash reserves in case of any economic friction
Check that your financial strategies are sound
If you can, hold off on major investments until the new year
Get your 2025 budget finalized (note my recent writing on this topic)

Preparedness truly is the key here, as we’re on the brink of legislative and economic shifts. Foresight is what’s going to help you stay steady.

And the reality is… Foreseeing risks should be an ongoing activity for you as a business owner, whether or not a new president is about to step into office.

That can be a heavy burden on you because you want to see your business thrive. And you also don’t want to feel the regret of taking a chance that backfires.

But I want to encourage you that, with a viable plan in place, you can competently steer your business away from taking losses because of risk. And I want to equip you today to do just that.

ERM Strategies & Managing Risk for Your Chester NJ Business

“The biggest risk a person can take is to do nothing.” –Robert T. Kiyosaki

The images of the recent hurricane season have been a strong wake-up call. The unexpected can hit anyone at any time. And I don’t need to tell you that owning a business comes with plenty of its own storms that happen inside your four walls.

So you already know this: you can’t avoid risk. But you can implement strategies to manage it with the help of Enterprise Risk Management (ERM) – the way to name, assess, and take on the risks that could threaten what you’ve built.

What’s the benefit here? Well, you don’t have to be afraid of what could go wrong – you can actually make decisions with confidence because you have systems in place that can handle even worst-case scenarios. And more than that, you’re ready to minimize the fallout if the unexpected does happen.

(Important note: This doesn’t guarantee that all consequences of a worst-case scenario are preventable or fully manageable—aka: it helps minimize impact rather than eliminate all risks.)

Of course, ERM isn’t a one-size-fits-all. It’s tailored to your industry, your comfort with risk, and other factors. But there are a few universal ERM bases every business owner needs to cover:

Set clear objectives: Before you start breaking down specifics, you need to establish a framework for what overall level of risk you’re willing to carry (while keeping your overall business objectives in mind).

For instance, if your vision leans toward aggressive growth, you might embrace more risk. But if you’re focused on slow, steady returns, dialing it down might make more sense.

Outlining your goals helps you to know whether risks are worth taking by showing you how they contribute to (or take away from) your bigger vision.

Identify and assess risks: Think broadly here. Possible areas of risk to consider are…

Financial (debt management, financial planning, and market changes).
Operational. How could risks that impact your day-to-day functions hamper your business’s ability to deliver?
Quality – anything that could affect the processes that ensure standards are met.
Security (Cybersecurity is a big one here – and small businesses are especially vulnerable).
External risks like natural disasters or inflation.

Assess these possibilities by two factors: Impact and likelihood. This will help you prioritize what to tackle first and how to go about building a treatment plan.

Quick tip — AI is your friend here. AI can use predictive analytics to help identify potential risks you may not think of, and can use data to assess them efficiently (saving you and your team the effort). *BUT… implement the use of these tools carefully to avoid data privacy risks.

Create risk treatment plans: You’ve got a few options here: Mitigate it, avoid it, transfer it, or accept it. Which method you choose depends on your risk appetite and the nature of the threat.

Using a natural disaster as an (unfortunately relevant) example, you might develop a mitigation plan by designating a crisis management team, creating a tier of business function priorities, and developing strategies for recovering from financial losses.

Or you could mitigate cyber threats by promoting awareness within your business and starting a cybersecurity training program for your team.

Another common example is purchasing insurance policies to protect you from financial losses (think property damage, liability claims, or business interruption) as a means of transference.

It’s a heavy load – having to carry the weight of “what ifs.” I want to see you empowered to weather any (literal or figurative) storm in your Chester NJ business by putting systems in place to fall back on when things go sideways. Truthfully, ERM is less about disaster prepping and more about confidence boosting.

And if you need any confidence-boosting specifically about any nagging financial concerns, my door is open:

calendly.com/ethan-hundleyadv

To what we can control,

Ethan Hundley

Your Chester NJ Business’s Budget Should Start Here

Fri, 08 Nov 2024 09:05:31 GMT

It seems like the government thinks they have an endless supply of dollar bills, the way they like to throw our tax dollars around.

But believe it or not, the government has to use an annual budget , and they have agencies in place to make them stick to it (whose purpose is actually to try to save your tax dollars, not spend them).

Here’s a recent example of the federal budget in action (which can impact you as you’re considering your annual business budget): Policymakers are soon expected to cut the federal interest rate a quarter percentage point (0.25 percent) – despite the impact of the recent hurricanes in the Southeast and the Boeing worker strike.

Meaning: If you’ve had business expansion ideas that you need to take out a loan for, the new year would be a better time to act on those plans as lower interest rates on loans are likely in 2025 (make sure to consult your financial advisor on loan terms and other important factors). And the good news is that rate could continue to drop this year and into next.

But if you’re not even considering a budget for next year, you’re not the only one – most business owners don’t (more on that later). However, this isn’t ideal. Not having a budget puts you in the position of solely relying on cash flow to gauge the financial health of your Northern NJ business, which I can tell you, is not a sufficient barometer.

Trust me – If you want to see true, sustainable profitability, you need a budget.

I know it’s tedious, but if you invest the time and effort, you won’t regret it (and we can help keep you accountable along the way).

Your Chester NJ Business’s Budget Should Start Here

“Unless commitment is made, there are only promises and hopes; but no plans.” –Peter F. Drucker

‘Tis the season for business budget planning, and I know you’re just giddy with excitement about it (or, not so much?).

It’s tempting to sweep the budgeting issue under the rug or to just make a half-hearted stab at it. And most business owners are doing just that – about 54 percent of small business owners don’t have any kind of formal budget.

But please hear me when I say, your business must have a budget . Without one you’re bound to waste money, misuse time and resources, and actually prevent your company from growing optimally.

Your biggest plusses to realistic budgeting: 1) Track your progress toward your goals, 2) confidently manage your cash flow, and 3) gracefully find the way forward when unexpected events occur — and if this hurricane season (or even supply chain shortages and dock worker strikes) has taught us anything… it’s that the unexpected will happen .

So today, I’d like to give you some pointers for avoiding business budget mistakes that I commonly see.

1. Realistically estimate sales.

It’s common for business owners to ambitiously forecast sales for the upcoming year. But overestimating your sales could lead to overspending, which could put you in a serious cash flow predicament.

So, how do you accurately estimate your sales?

Use historical data to build your projections (it’s a bit more concrete than wishful thinking).
Account for market changes, economic factors, and competition.
Implement a rolling forecast – be prepared to revisit your sales estimates based on actual performance throughout the upcoming year (ideally every quarter) and adjust accordingly.

2. Accurately account for expenses.

Underestimating expenses can be just as dangerous as overestimating sales – it can lead to cash flow problems and even debt if you get blindsided by too many overlooked costs.

When planning your expenses for the upcoming year, leave no stone unturned. Make a checklist for easily overlooked costs such as legal fees, utilities expenses, hiring expenses, or insurance increases.

Again, use historical data to your advantage. Review your numbers from last year to observe trends in expenses and anticipate future costs (keeping in mind how expenses might fluctuate seasonally).

3. Create a contingency plan.

Equipment breaks. Worldwide pandemics cause shutdowns. Hurricanes devastate cities (I’m looking at you, Helene and Milton) – it’s just life. And without a contingency fund in place, one unplanned event like this could mean a significant setback in profits.

Allocate 5-10 percent of your budgeted expenses for an emergency fund, to start out with. This amount may vary depending on your business’s risk tolerance, cash flow needs, and your industry’s volatility. If you can’t start with 5 -10 percent, starting with any percentage will do. You can always work up to a larger amount over time.

Then (for the sake of your peace of mind), do some scenario planning. Envision scenarios in which the most likely and worst case events like the ones mentioned above occur and write up a plan of action.

For example, some questions you could ask yourself: How would your cash flow be impacted by a recession? How would you respond to an emerging competitor offering better prices? How could you reallocate resources if you had to recover from a natural disaster?

The time for creating next year’s business budget is here. While it might be a tedious process, the unexpected disasters and the uncertainty swirling from the upcoming presidential election demonstrate that having a sound budget is more important than ever.

And as a final tip – consider tax planning moves and deductions and credits you can take as a factor in your budget. See where you’re missing opportunities or where you need to make strategic shifts in your Chester NJ business to reduce your tax burden. We’re here to guide you on that one.

calendly.com/ethan-hundleyadv

To a budget-strengthened new year,

Ethan Hundley

Sales Strategies: Mistakes That Could Be Costing Your Chester NJ Business

Fri, 01 Nov 2024 09:04:57 GMT

Less than two weeks remain until the 2024 presidential election. While Elon Musk is making headlines with his million-dollar-a-day prize for swing-state voters (sign a petition, become a millionaire — interesting tactic and a possibly illegal one )… what you need to know about are the financial ripple effects this election could bring to your Chester NJ business.

As a business owner, you have some skin in the election game. Putting your personal politics aside, it’s important to know how your business’s bottom line could be affected two weeks from now…

A Trump-run administration will mean an extension of many things in the Tax Cuts and Jobs Act (TCJA) set to expire in 2025. This generally means lower tax rates across the board for businesses (especially in the area of corporate tax rates).

Meanwhile, a Harris-headed administration will continue to support the current administration’s initiatives with the Inflation Reduction Act (IRA) and green energy incentives. This includes doubling the Research and Development Tax Credit for small businesses.

I bring these things up to help you prepare (not stress). Whether tax cut or incentive, there are ways your business benefits. BUT… the smartest move you can make right now, regardless of which party comes out on top, is to sharpen your focus on profit. This is your best hedge against uncertainty and something you CAN control when other things are uncontrollable.

Trimming the fat from inefficient practices is a start, but if you really want to maximize profits, you need to dial in on what matters most for keeping them flowing: sales.

I suggest today that it might be time to go back to the drawing board with your sales strategies — at the very least to review them, especially if you’re having trouble converting people into paying customers.

Ask the hard questions.
Are the sales strategies you’re currently using really as effective as you think they are?
Are you actually converting prospects into faithful customers?

It’s okay if your answers to these questions are no, or a quiet I don’t know. I’m here to help you find the way forward.

Sales Strategies: Mistakes That Could Be Costing Your Chester NJ Business

“People will never forget how you made them feel.” – Maya Angelou

I think I’m safe in assuming you have some sales strategies in place for your business – the bridge that connects your product or services with the folks who need them. But I submit to you (and bear with me here) that it may be time to re-envision your sales strategies.

I’ll let research speak for itself: According to a study by PwC, 73 percent of consumers said they would switch brands if they feel a company doesn’t care about them.

This means that if your current sales strategies are causing perceived indifference in your customers, they need a facelift (and fast).

What do customers perceive as indifference? Let me give you a few examples:

Open-door delusion: Doctors, retailers, and restaurant owners are usually guilty of thinking that because their doors are open, customers will just come to them on their own.
One-size-fits-all selling: Relying on one or two basic sales methods without considering the best way to meet the customer where they’re at.
Not giving personalized attention : Sending out mass-produced messaging or failing to personalize your products or services.

The message your customers receive is that their specific needs and interests aren’t a high priority to you. Not very loyalty-inspiring, is it?

So, what’s the alternative? Showing your customers you care. They won’t know unless you show them.

And I think you’ll be amazed by how far a little customer nurture can go in boosting your sales. According to a study by Bain & Company , efforts to increase customer retention by just 5 percent can boost profits by 25 to even 95 percent (wow!).

Here are a few practical ways you can demonstrate that kind of care:

Get to know your customers. When you really understand your customers, you’ll unlock the power of resonating with them. Instead of saying, “Here’s our product,” you’ll be saying, “Here’s the solution you’ve been waiting for.”

Send out surveys to gather real feedback. Analyze your customer service interactions to identify common concerns. And for the sake of relevance, watch for trends on social media that your audience cares about.

Offer your customers real value. Most businesses are shouting “Buy this!” But your approach needs to be “Let me help you.” Offering value (typically through content marketing) tells your customers that you’re focused on them, rather than simply doing what it takes to make a profit.

Trust me, it really works – 74 percent of companies say offering value through content marketing boosts lead generation.

Provide content that educates, entertains, and engages (with a little SEO magic sprinkled in). The goal with this is for customers to walk away feeling smarter or better prepared.

Follow up consistently. So, you’ve made the sale. Congrats! But your work isn’t finished yet. You need to follow up with your customers to show that they matter to you even beyond the sale.

Your aim is to thank them for their business, to make sure you meet their needs, and to ask open-ended questions about their experience. This can happen through phone calls, thank you emails, or feedback surveys (but be sure to use your customer’s preferred method of contact).

People go where they feel valued. It’s as simple as that. So, here’s my challenge to you: Take a look at your sales strategies and ask yourself, “Do my Northern NJ customers know I care?” If the answer isn’t a resounding yes, it may be time to switch gears.

I know how tedious the strategizing process can be, and I’m here to chat with you about whatever bumps you’re encountering along the road.

calendly.com/ethan-hundleyadv

Helping you sell smarter,

Ethan Hundley

Good Leadership in Your Chester NJ Business Starts Here

Thu, 24 Oct 2024 09:03:28 GMT

When running a business, no one prepares you for how to handle hurricanes like Helene and Milton. They probably didn’t think to cover that chapter in business school.

The IRS is stepping up to provide assistance to business owners throughout the Southeast who have been affected by the recent storms.

If your business was impacted by either Hurricane Milton or Helene, the IRS is postponing a number of filing and payment deadlines until May 1, 2025. This relief applies to businesses with returns normally due in March or April 2025, as well as anyone who had an extension for their 2023 federal return. [Note: This does not mean an extension of time on paying your 2023 taxes.]

The IRS is also cutting some slack on payroll and excise tax penalties for businesses that missed deposits in the weeks after the hurricane, as long as they’re paid by October 21.

For all the details on what’s covered, check out the IRS disaster assistance page and get back to focusing on what matters—rebuilding your business.

I’m not just talking about paperwork and deadlines. I’m talking about leadership. When disaster strikes, good leadership is what will keep your team grounded through the chaos.

When you think about good leadership, what comes to mind? Certainly, it’s not someone who never makes mistakes and never asks for help. It’s likely you imagine someone who leads by example. Someone who prioritizes integrity and honesty and has the ability to learn from their mistakes.

We think of that because those are the best kind of people to work with. Which is why you want to aspire to be that person in your business, too.

So, it’s time to do a little internal digging: Are you showing up as the leader that your Chester NJ business needs?

Good Leadership in Your Chester NJ Business Starts Here

“Leadership is an achievement of trust.” – Peter Drucker

The expectations placed on you as a leader can be a heavy burden to bear. You have to have all the answers, bounce back from every setback, be the caring mentor your employees need, and be a genius problem-solver. Oh, and don’t forget being the office snack-stocker extraordinaire.

It can feel impossible to live up to these expectations of good leadership because—let’s be real—it IS impossible.

The truth is, good leadership isn’t about being perfect. It’s about being authentic .

Why? Because authentic leadership creates a culture where employees feel comfortable and understood. Your team wants to rally behind a leader that displays integrity and honesty.

Don’t just take my word for it – studies have shown that authentic leadership results in a more inclusive work culture and more engaged employees, which leads to lower turnover rates and improved workplace productivity.

So, how do you become an authentic leader? Start with these intentional habits.

Practice self-reflection

“The number one area that will impact your business and leadership is the ability to effectively manage your own mental, emotional, and physical state.” ( Kevin Getch, CEO Webfor )

Why? Because the practices you put in place for YOUR internal well-being (inevitably) trickle down and determine the well-being of your team.

Good leadership starts with self-reflection – assessing who you are, who you want to be, and how you’re going to get there.

You could start practicing self-reflection by…

– Journaling. Jot down your thoughts, feelings, and the highs and lows of your day (Specifically, gratitude journaling is a powerful tool for reflection.)

– Weekly review. For example, every Saturday morning you could sit down with a cup of coffee (or Red Bull, if that’s your thing) and make note of your accomplishments, challenges, and lessons learned.

– Monthly evaluation. At the end of each month, assess how well you’re meeting your goals and what changes you need to make to meet them.

Develop listening skills

If you want to show empathy to your team members, listen to them.

And no, I’m not talking about the kind of listening where you’re nodding your head and simultaneously thinking about your next meeting. I mean asking questions and paying attention (AKA – active listening).

The next time you’re in a conversation with a team member, try paraphrasing what they are saying (ex: What I hear you saying is…). Ask clarifying questions. And—this is a big one—put away your phone or any other distractions. Show that you hear them and actually care about what they have to say.

Ask (and encourage) lots of questions.

“Great leaders constantly ask questions.” ( Vanessa Nornberg, CEO of Metal Mafia )

Ask questions to spark ideas and challenge your business framework. Why did a customer leave that nasty review? What’s missing in our company culture? How could our product be adapted to better fit the needs of our customers?

Question the status quo. Seek diverse perspectives. Be open to unexpected outcomes. Authentic leaders encourage exploration (and know that mistakes are part of the process). If you don’t fear failure, your team won’t either.

Good leadership goes much deeper than keeping up a facade of perfection. It’s about creating an environment where people can bring their whole selves to work, feel valued, and contribute their best. We know that, especially in the area of financial management, leading your Northern NJ business can be challenging.

From leader to leader, we’re here to lend an ear.

calendly.com/ethan-hundleyadv

To being human,

Ethan Hundley

Sales Tax Filing Mistakes To Avoid in Your Chester NJ Business

Tue, 15 Oct 2024 09:02:49 GMT

Despite being a nation that systematizes and plans, when the unexpected occurs, we still find ourselves reeling and trying to adjust. In the case of Helene and western North Carolina, it’s been a difficult battle. Who could have predicted that kind of flooding and devastation?

We’re still undone by the images and updates about search and rescue efforts in those areas. Our hearts and thoughts go out to you if you or anyone you know and love has been facing this. It’s truly unimaginable.

The IRS is doing their part to help. First, by sending their own agents to help with relief efforts.

Second, by extending 2024 deadlines and 2023 payments and deadlines to May 2025 for your business. This goes also if you live in South Carolina, Georgia, Alabama, and various parts of Virginia, Tennessee, and Florida. More details on that in their recent statement .

We know that suffering these types of moments in your Northern NJ business can be difficult. But we’re committed to doing what we can to help you as well. If you need guidance on anything, reach out: (973) 940-0175

Something we find a lot of retail-focused businesses struggle with is sales tax filing. It’s one of the big areas that cause businesses to become audit-vulnerable and/or pay way more in taxes than they expected.

To know if that’s you, read on.

Sales Tax Filing Mistakes To Avoid in Your Chester NJ Business

“The only thing worse than being wrong is not learning from your mistakes.” -Elon Musk

If you’re struggling to keep your head above water with sales tax filing, you’re not alone. Business owners make mistakes in this area all the time because it’s so nuanced.

But there’s good news: Filing sales tax can actually be manageable when you get a grasp on what to do (and more importantly – what not to do). Instead of constantly asking yourself, “Am I doing something wrong?” you can learn what mistakes to avoid before you make them.

(Side note: If you realize as you’re reading this that you’re guilty of any of these mistakes, stop and give us a call. You’ve got an experienced Chester NJ accountant here in your corner to help you fix it: (973) 940-0175)

Even beyond steering clear of costly penalties, learning about these mistakes can help you feel – dare I say – confident about your sales tax filing. That’s the headspace I want to help you live in as a business owner.

Mistake #1: Misinterpreting exemption certificates

Exemption certificates are the concrete proof that a buyer legally qualifies for tax-exempt status when making a purchase. These certificates often have loads of fine print, which leaves plenty of opportunities for misinterpretation.

This can happen when:

Certificates lack crucial data.
The exemption code is invalid.
The expiration date gets overlooked.
The scope of the exemption isn’t clear.

I know it’s tedious, but you’ve got to pull out the fine-tooth comb with your exemption certificates. Double-check everything.

Mistake #2: Failing to account for nexus

The nexus issue has two main facets: Remote selling and economic nexus laws.

If you’re selling products remotely to a neighboring state, you’ve established a nexus. And it’s going to cost you if you don’t keep track of the sales tax you now owe there.

The economic nexus is that state’s way of saying, “Hey, if you’re making enough money from our residents, we want a piece of the pie.” This happens when you hit a certain amount of revenue or a number of transactions.

You could try to avoid nexus-related mistakes on your own. But keeping up with changes in legislation and tracking the necessary sales data would cost you heaps of time and energy (that you probably don’t have to spare).

I recommend calling in the experts on this one (be sure to talk to me about this) and then setting up automated tracking software.

Mistake #3: Miscalculating taxes on bundled sales

Sales tax filing becomes confusing when bundled sales of products and services come into play. Think computer and software packages, or maintenance contracts involving taxable and non-taxable components.

So, how should you tax a product and service bundle?

Determine the taxability of each individual item (according to state legislation).
Use the Fair Market Value Method – allocate tax to each item based on its fair market value relative to the total value of the bundle.
Account for shipping and handling taxes based on – you guessed it – state legislation.

Sounds like a piece of cake, right? These calculations can be potentially cumbersome, so consult with us to make sure you’ve got the numbers correct.

These are just a few of the potential pitfalls that can happen with sales tax filing. The more educated you are about them, the more you can stay in the clear with the IRS AND give yourself some precious peace of mind.

If sales tax filing still feels daunting to you, I get it. Reach out with your questions (and even your frustrations):

calendly.com/ethan-hundleyadv

To being human,

Ethan Hundley

Ethan Hundley on How You as a Business Owner Pay Yourself

Tue, 08 Oct 2024 09:02:08 GMT

I’m watching in disbelief, like you, as I see the photos of the hurricane devastation keep rolling in. It’s hard to believe so much infrastructure can be swept away that quickly. Our hearts are grieving for those who lost loved ones and homes and businesses from Helene.

I’ll keep you updated on any deadline extensions that the IRS makes available in the coming days – they usually do in situations like these.

We’d all like to make deadlines go away in good times, much more so in hard times. You’ve never heard somebody say, “I love a good deadline.” They’re demanding (and often bring on anxiety).

But…as your accountant, I’m compelled to remind you about a big one coming up.

If your business taxes are still on extension, and we’re waiting on something to get yours finalized, October 15 is the submission deadline. Let’s get everything finalized and wrap 2023’s taxes up.

Because you’ve got to put your focus on some other aspects of your Chester NJ business, like payroll. It’s your employees’ favorite day of the week.

As a business owner, the former thrill of payday as an employee is often overwhelmed by the anxieties and pressures of payroll and your business’s expenses. Especially if you’re struggling to pay yourself.

It’s important to know, if you’re in that predicament, it’s not an uncommon thing. A lot of business owners struggle to pay themselves (or pay themselves enough). According to this study , most business owners pay themselves less than 100k annually, and roughly 30 percent of business owners don’t even take a salary.

But it doesn’t have to be that way. If you’re just starting out, business owner pay is a topic you’ll want to make sure you think strategically about so you aren’t just depending on the profits to take your cut.

Getting paid is just as important for you as it is for your employees. Here’s how you do it…

Ethan Hundley on How You as a Business Owner Pay Yourself

“Don’t be afraid to give up the good to go for the great.” -J.D. Rockefeller

You work hard as a business owner, probably harder than your employees, because this is your business. So, it only makes sense that you get paid for it.

But if you’re underpaying yourself in order to meet the demands of all your expenses and payroll, it’s not necessarily the best way to go. Although you avoid IRS entanglement (more on that later), you end up hurting yourself, which inevitably hurts your Northern NJ business. It’s a vicious cycle.

Mastering the delicate balancing act of business owner pay can be hard. But the good news is, figuring out how to pay yourself isn’t impossible. It doesn’t even have to be unenjoyable. You just need a grasp of which business owner pay method is right for you and a plan for executing it.

Let’s start with some business owner pay options that are often used:

Salary — With a salary, you receive the same amount with each paycheck, just like an employee. Your employment taxes are withheld automatically. It’s predictable and rigid.

If you have S-corp, C-corp, or LLC taxes as a corporation (and actively work for your business), you must take a salary.

Owner’s draw — This option is typically used by owners of sole proprietorships, partnerships, and LLCs which are not taxed as corporations because it provides flexibility. You simply take money from your business’s net profits by writing yourself a check or electronically withdrawing funds from your bank account.

Don’t forget: Self-employment taxes are not automatically withheld, so it’s up to you to budget for and pay them quarterly. A good rule of thumb is 30 percent of your net profits. This percentage varies depending on specific state taxes and your individual situation.

Dividend — Dividends are payments made to shareholders from a company’s profits. They’re generally taxed at a lower rate than regular income (and are in general pretty tax-efficient). Owners of C-corporations or those who own shares in a company can receive dividends in addition to their salary.

Profit sharing — With this option, business owners distribute a portion of the company’s profits to themselves and potentially their employees. This method can be highly motivating but requires detailed planning. Profit-sharing plans often involve formalized employee benefit plans, and how they are implemented will depend on your specific situation.

So, how do you choose? Well, there are two considerations:

1. Much of this will be decided by your business structure . Some structures are required to take a salary (see note above), but you can get a tax-friendly boost by tapping into dividends. For other structures, you can lean into an owner’s draw or profit-sharing option depending on what’s most beneficial for you.

2. Your cash flow will also be a deciding factor . Is your business brand new, or do you have a steady cash flow established? Are you in an ebb-and-flow financial situation? Or have you been seeing cash come in like clockwork for a while? A salary with added dividends lends to a solid financial foundation. An owner’s draw or profit-sharing setup is advisable if you’re still trying to find your footing.

Then comes the question of deciding how much you’ll pay yourself. Every business owner wants to know how to do this in a way that rewards your hard work but also doesn’t strain the business. It’s definitely a balance that can take time to land.

Here’s a checklist you can start with:

Decide how much you need based on your personal budget. Write down the amount, then set it aside.
Determine what your business can afford. If you’re using an owner’s draw, look at your business’s net profit. If you’re using a salary, look at your annual gross revenue, then subtract your operating expenses. Divide that among the 52 weeks of the year to help you set a payroll schedule.
Look ahead and behind. Check your financial records from previous months and use those to project what your income will be a few months into the future. Think about upcoming taxes, occasional or annual expenses, expansion plans, and expected fluctuations.
Consider possible legal obligations. This is where that “reasonable compensation” limit comes in: For certain business structures (usually S corporations), the IRS imposes a limit on how much business owners can pay themselves. Basically, this means a business owner’s pay must match what most business owners in the same industry are being paid. Business owners can face some nasty tax liabilities if they don’t comply (and trust us… it isn’t pretty). Be sure to double-check these requirements before your salary is set.

With business owner pay, your goals are simple: Keep your Northern NJ business healthy, your taxes in check, and your hard work rewarded as much as possible.

Don’t get too overwhelmed with the details. If you’re still scratching your head about how to pay yourself, let’s chat.

calendly.com/ethan-hundleyadv

Because you should get paid too (and well),

Ethan Hundley

Cloud Storage for Businesses: Hundley Advisors LLC’s 7 Steps For Going Digital

Fri, 04 Oct 2024 09:01:39 GMT

Fall is “officially” here (even if it still doesn’t quite feel like it), but that also means a lot less sunlight for the next few months. At least there are mugs of steaming cider and pumpkin-flavored pastries to look forward to.

I’ll keep you updated on any deadline extensions that the IRS makes available in the coming days – they usually do in situations like these.

As a reminder, the “ERC” stands for the Employee Retention Credit, and it was one of a few huge credits that Uncle Sam put into place in 2020 … and it spawned a TON of cash grabs, sharky practitioners who preyed upon struggling business owners looking for a lifeline, and a bunch of disinformation. The IRS has been seriously cracking down on faulty claims, and it is very much worth ensuring that any claims your Northern NJ business made have proper standing.

So … this really only applies if you got caught up in the ERC claim craziness but shouldn’t have. It also only applies to claims for the 2021 tax periods (not 2020 claims). November 22 is the last day to withdraw your ERC claim via the voluntary disclosure program. Find out if you’re eligible to do so here .

If you’re in this boat and aren’t sure, it would 100 percent be worthwhile to have a knowledgeable Chester NJ tax pro look it over and make sure everything with your filing met the requirements. I’ve got some time to take a look for you:

calendly.com/ethan-hundleyadv

Now, I know I harp on keeping good business records on the regular. But I hope you can forgive me because it’s actually my job to do that.

What I don’t often take time for, though, is explaining what “ good recordkeeping ” means. As in, how long to keep business records and what exactly to keep and where to store them and for what purpose and how in the world do you keep them secure?

All important details if you ever need to file a tax return or make a decision about a potential business investment.

Wait, that’s you? Alright then, you’ve come to the right place.

Of all of the questions around this topic, cloud storage for businesses is probably the most asked, and for good reason. If you’ve decided to go digital with your business records, you’re making a smart move.

Digital storage offers a host of benefits, from increased accessibility to reduced storage costs. But with the rise of cyber threats, it’s crucial to approach digital storage very, very carefully.

So let’s talk about best practices for cloud storage for businesses, making the transition, what to keep, and for how long.

Cloud Storage for Businesses: Hundley Advisors LLC’s 7 Steps For Going Digital

“I know that I shall meet my fate somewhere among the clouds above.” – William Butler Yeats

Your business records are like your financial diary. They tell the story of your business, from the day you started to where you’re headed. They’re crucial for filing taxes, defending your Chester NJ business in a legal dispute or tax audit, making any kind of forward-thinking financial decision, and eventually selling your business someday.

You know all of that already.

But there’s still a debate over paper vs. digital storage. I think this is partly because so many businesses have relied on paper storage for years, so the switch to digital is no small task. A 2023 survey by Iron Mountain revealed that 37 percent of businesses still rely heavily on paper records.

But even as the trend of documentation moves toward digital, there’s still a mixture of both types to deal with as a business owner.

As a financial professional, I encourage cloud storage for businesses. These records are easier to store, organize, and access.

We’re generating more data than ever before, which can be a blessing and a curse. On the one hand, it’s great to have everything at your fingertips. But on the other hand, it can be a security nightmare.

First, what kind of records should you keep?

Here’s a quick rundown:

Financial records: This includes your income statements, balance sheets, tax returns, credit card statements, and bank statements.
Employee records: Think payroll information, W-2s, W-4s, and time cards.
Customer records: This includes contracts, invoices, and customer contact information.
Vendor records: Purchase orders, invoices, and payment information.

Second, how long should you keep these records?

It depends on the type of record and local regulations. But here are some general guidelines:

Tax returns: 6 years
Employee records: 7 years after the employee leaves the company
Customer records: 3 years after the last transaction
Vendor records: 3 years after the last transaction

Third, how do you transition from paper to digital?

I’m SO glad you asked. ��

Assess your current paper records: Determine the types of paper records you have and the retention requirements for each.
Scan your documents: Invest in a high-quality scanner and start scanning. (Bonus tip – Consider using optical character recognition [OCR] software to make your scanned documents searchable.)
Organize your digital files: Create a folder structure that makes sense for your business and organize your scanned documents accordingly.
Shred your paper documents: Once you’ve scanned your documents, securely shred the paper originals to protect your sensitive information.
Implement a cloud storage solution: Choose a reputable cloud storage provider for businesses and upload your scanned documents.
Set up regular backups: Back up your digital files to an external hard drive or another cloud storage service to protect against data loss.
Train your employees: Educate your employees on how to use the new digital system and ensure they understand the importance of data security.

* Bonus tip: You can hire a firm to do much of this for you if you have the budget for it.

And fourth, how do you keep your data secure?

The risks of cloud storage for businesses are significant. Hackers can access and steal your digital records, leading to financial loss, reputational damage, and legal consequences. And then there are technical failures, human error, or natural disasters ( 74 percent (!) of data breaches, in fact, involve human errors).

According to IBM’s Cost of a Data Breach Report, the average cost of a data breach in 2023 was 4.88 million .

But how to prevent all of this? There’s no easy answer, and I would encourage you to consult with an IT or data security expert for advice and options. The risks and security possibilities are ever-changing.

Generally speaking, though, start here at a minimum:

Choose a reputable cloud storage provider.
Use strong passwords and multi-factor authentication.
Encrypt your data.
Regularly back up your data.
Implement access controls.
Educate your employees about cybersecurity best practices.

Now, hopefully, you feel a little more equipped to conquer your recordkeeping chaos. Start small. Begin with the most important documents and gradually transition the rest. I’m here to help you fix or update your records, anytime:

calendly.com/ethan-hundleyadv

Happy to help,

Ethan Hundley

How to Pay Estimated Taxes: Is Your Chester NJ Business Doing This Right?

Thu, 26 Sep 2024 09:01:07 GMT

Cue the pumpkin stands, trick-or-treating supplies, mannequins with sweaters, and the way-too-perfect apple-picking photos in your social media feed.

The calendar flipped to September and suddenly it’s fall … y’all. (Saw that one on a scrolling bank sign yesterday, so you know it must be true.)

For you, know that this is the beginning of the holiday cycle, which serves as a good reminder of things to prepare for in the coming months.

Like this…

If your Northern NJ business has any type of beneficial ownership situation, the deadline for filing your BOI is coming up quickly. Not sure if you are a reporting company? Here’s how you know (as quoted directly from the BOI reporting FAQ page ): “A reporting company created or registered to do business before January 1, 2024, will have until January 1, 2025, to file its initial BOI report.”

The rules are different if you created a business this year (2024) or start one after the deadline. They are:

2024: “90 calendar days to file after receiving actual or public notice that its creation or registration is effective.”
2025: “A reporting company created or registered on or after January 1, 2025, will have 30 calendar days to file after receiving actual or public notice that its creation or registration is effective.”

If you’re still unsure about the whole thing, we’re here for you at Hundley Advisors LLC. And if you’d like some guidance on it so you’re really clear on things, grab a time on my calendar:

calendly.com/ethan-hundleyadv

Something else you should be thinking about:

Estimated taxes for Q3 are due today, September 16th (as of this writing). These last two Q3 and Q4 tax payment deadlines seem to always be trickier for business owners, for whatever reason. Maybe it’s the busyness of summer vacations, back to school, and then the holidays later on that make it harder to remember.

Understanding and knowing how to pay estimated taxes is a nuisance for business owners across the board until you have a system in place or an accountant like me to track it all for you.

Which businesses are required to pay? How do I know if I need to make a payment? How much do I pay?

I have answers to all of these questions and more. Because with the right guidance, you can quickly cross this off your list and keep your cash flow fluid, by not paying too much, or doing the reverse, which ends up costing more.

So let’s make sure you’re doing this right.

How to Pay Estimated Taxes: Is Your Chester NJ Business Doing This Right?

“A tax is a fine for doing well, a fine is a tax for doing poorly.” – Mark Twain

Before we talk about how to pay estimated taxes, let’s talk about who needs to pay them. Estimated taxes are quarterly payments made throughout the year to prepay your annual income tax liability .

For most businesses, these payments are due on April 15, June 15, September 15, and December 15 (though the IRS will push those dates back if they fall on a weekend or holiday like they did for the most recent deadline I mentioned).

Who needs to pay estimated taxes?

Generally, if you’re a business owner and you expect your annual tax liability to exceed 1K, you’re on the hook. That includes sole proprietors, partnerships, S corporations, and C corporations.

Though there are some exceptions:

Certain corporations: Some corporations, such as tax-exempt organizations, are exempt.
Farmers: Farmers have specific rules for estimated tax payments, and they may not be required to make payments if their income is relatively stable.

So, how do you determine your estimated tax payments?

It’s a bit more involved than simply guessing. This is where an active relationship with a qualified business tax preparer becomes your easy button.

Because how to pay estimated taxes does involve up-to-date data collection, math, and knowledge of applicable tax deductions and credits. Form 1040-ES should be used to calculate all of that together.

Simply put, you’ll need to calculate your expected annual taxes and then divide that amount by four. This will give you your quarterly estimated tax payment.

If you’re experiencing similar revenue to last year, then last year’s tax return can be a good guideline. We’re talking about your business income, wages, and other sources of income.

But also factor in any deductions or credits that may reduce your taxable income, such as the standard deduction, itemized deductions, or tax credits like the earned income tax credit or the child tax credit.

But what if your income fluctuates throughout the year?

In this case, you may need to adjust your payments accordingly. But that means you have to stay on top of your income and expenses to ensure you’re paying the correct amount each quarter.

What happens if you don’t pay on time?

Then you get to pay the IRS even more. If you don’t pay enough estimated taxes or don’t pay them on time, you may be subject to penalties:

Late payment penalty: A penalty of 0.5 percent of the underpayment amount for each month or part of a month that the payment is late.
Interest penalty: Interest is charged on the underpayment amount from the due date of the tax payment until it is paid in full.

And know that if you underpay your estimated taxes, you may need to file an amended return to correct the issue.

Where to pay them?

You can send estimated tax payments with Form 1040-ES by mail , but the easiest way is online. Use the IRS2Go app or go through your online account , where you can see your payment history and other tax records.

Are there any special rules to know about?

You already know the answer to this because we’re dealing with the IRS. Yes, particularly the “safe harbor” rules, which provide a simplified method for calculating estimated tax payments.

If you meet certain criteria, you may be able to avoid underpayment penalties by paying at least 90 percent of your current year’s tax liability or 100 percent of your prior year’s tax liability.

If you’re still unsure about how to pay estimated taxes for your Chester NJ business or need personalized guidance, I’m here to help. I can provide you with tailored advice, answer your questions, and help you avoid those pesky penalties. Let’s work together to simplify your estimated tax process:

calendly.com/ethan-hundleyadv

Your easy button for taxes,

Ethan Hundley

How To Start Your Chester NJ Small Business, Part Two

Fri, 20 Sep 2024 09:00:38 GMT

The next generation might not know what Benjamin Franklin was talking about when he said “A penny saved is a penny earned.”

That and so many other cliches we take for granted related to money. Lucky penny…pennies on the dollar…penny for your thoughts…see a penny pick it up, all day long you’ll have good luck.

Why? Because penny abolitionists want to get rid of them . Yes, I said penny abolitionists – they’re real (even former President Obama is one).

A big reason for this? The cost—3 cents for every penny made. What do you think? Do we really need the penny anymore? Well, to make change for 99-cent bargains and other penny-riddled price tags, I suppose.

So, why the penny talk?

Because this is a good moment to think about payment systems and pricing in your Northern NJ business. How would the elimination of the penny affect that? And if you’re starting a business, it’s an even more important possibility to consider from the outset.

If you already run a small Chester NJ business and have to make that shift, plan ahead for how to round prices. If you haven’t adjusted prices for inflation, this might be the perfect excuse to do that. Make sure to keep pricing fair and transparent for your customers.

Of course, you can forego the cash route altogether and opt for digital payments for your services. Plenty of businesses do that. And if you’re at the beginning stages of business ownership, you can pull this off more easily now than making the switch later. It’s one of the many things you’ll want to consider in your planning list.

calendly.com/ethan-hundleyadv

Now, last week I talked about the steps to follow for starting a new business and stopped about halfway through because there was so much to cover. So I’m picking that thread back up this week to talk about business structure types, requirements for filing the legal documentation, and operational setup.

Here’s part two…

How To Start Your Chester NJ Small Business, Part Two

“If you’re not embarrassed by your first version, you launched too late.” – Gary Vaynerchuk

Since I covered some of the preliminary business planning considerations in my last note, we’re moving into the formal business startup process today.

Which businesses are required to pay? How do I know if I need to make a payment? How much do I pay?

Legal Requirements and Business Structure
The legal requirements for starting a business are going to vary by state, so search online for your state’s specific rules.

Generally speaking, you’ll need to choose a business entity (more on that below), choose a business name, check to see if that name is available with your state, register your business name with your state, register for a federal EIN * (Employer Identification Number), open a business bank account (you’ll need an EIN to do this, plus it will come in handy for paying all of those registration fees), and check into any state-mandated business licenses or permits required for your type of business.

*Note that not every business needs an EIN. If you don’t have employees, many sole proprietors and single-member LLCs aren’t required to get one. But they are free and it provides for easier scalability down the road.

All of this will take some time and patience. Be prepared to fill out multiple online forms and be sure to save all of your registration documents in a safe place. Fortunately, most of it can be done online these days.

But the first step is to decide about your business structure (also called business entity). This is a great opportunity to consult with someone like me who can walk you through the advantages and disadvantages of each of the business structure types, as it relates to your venture.

So give me a call to have that conversation: (973) 940-0175

Before we talk, here are the basics of the most common business structure types . Your choice here determines what taxes you’ll pay and how you’ll pay them.

Sole proprietorship – This is the simplest type of business entity, where the owner is the business. Business income is reported on the owner’s personal income tax return, and the owner is liable for all business debts.
Partnership – Two or more people own the business, and income and losses are divided among partners based on their partnership agreement. Like a sole proprietorship, each partner reports their share on their personal income tax return and partners are personally liable for business debts.
Limited Liability Company (LLC) – Owned by one or more members, an LLC can be taxed as a sole proprietorship, partnership, or corporation. By default, they’re taxed as a pass-through entity (sole proprietorship or partnership), where profits and losses pass through to the members’ personal tax returns.
Corporation – This is a more complex business structure where the company is owned by shareholders. It’s a separate legal entity from its owners, and it’s subject to corporate income tax, where dividends paid to shareholders are subject to double taxation (corporate level and personal level).
S Corporation – An S Corp is a pass through entity where profits and losses pass through to shareholders’ personal tax returns. There’s no corporate income tax, and it’s limited to 100 shareholders.

Of course these are very basic definitions, and there are more nuances to each that we should discuss as it relates to your new business.

Setting Up Operations
Now that we’ve made a plan, carefully selected an entity from the available business structure types, and filed all necessary legal docs, let’s focus on a few operational tasks.

Logistical considerations should start with deciding on your physical location for doing business, and whether that’s a lease or purchase decision. From there, you’re setting up workspaces, pricing and establishing relationships with supply vendors, and figuring out how to store and track inventory.

Lots of decisions to be made in this stage that you’ll probably end up changing later after either trying it out and finding it doesn’t work well, or growing to the point that it all needs to be adapted for scale. It’s all part of the journey so don’t beat yourself up for needing to pivot halfway through.

Then think about your approach to marketing. Define your target market (this is really important), develop a brand identity, figure out where your market is hanging out, and make a plan for reaching them there. Outside help is very useful in this area; you can only do so much yourself.

And of course, you might need employees. The biggest thing to note here from a tax standpoint is that you’re setting up payroll properly and paying all associated taxes, because the government will notice if you’re not. Also dig into the applicable labor laws for your state and industry.

Other elements of operations to plan: technology infrastructure, insurance coverage, employee training, data security, and product distribution. Of course there are a thousand nuances depending on your business type, industry, and location, but my intent here was to get you started on the right foot.

If this sounds like a lot and makes you feel overwhelmed, that’s probably a good thing. Starting a business is a long process, and you’ll need help along the way. Don’t be afraid to ask for it:

calendly.com/ethan-hundleyadv

Let’s do this together,

Ethan Hundley

How To Start A Small Business: Hundley Advisors LLC’s Steps (Part 1)

Fri, 13 Sep 2024 08:59:54 GMT

We’re all waiting and watching (and hoping) to see if federal interest rates will be dropping soon. But the outcome of the August jobs report could also have a big impact on stock market prices.

What does this mean for you as a small business owner?

Well, a weak jobs report means consumers are more cautious about spending in your Chester NJ business, and you might have a reduced ability to hire the right kind of people (something important when you’re considering starting your own business).

The benefit is it would mean a drop in federal interest rates. This makes loans a bit easier to obtain and at a lower interest rate (also important when you’re deciding to launch a new business). A strong jobs report means a healthy economy and more likelihood of increased business for you.

The biggest point here is that the Fed will use this report to make decisions on the federal interest rates (currently around 5.25 – 5.5 percent). There are positives on both sides, but the relief from lower federal interest rates will be helpful for your business.

We’ll keep an eye on things for you and help you figure out the best steps to take, no matter the outcome.

I’m here to help you at every stage of your Northern NJ business. And today, I want to speak directly to those who are at the beginning.

When you think of a new business owner, what picture comes to your mind?

Ask 10 people, get 10 different caricatures. Or maybe it’s closer to 5.5 billion different personas because that’s how many businesses were started in the U.S. last year.

Not all business startups are initiated by new entrepreneurs. I’ve known many seasoned Chester NJ business owners who have launched multiple companies over the course of their careers.

But no matter your experience, the process for how to start a small business is basically the same. Bookmark this one for your next venture, or your very first.

How To Start A Small Business: Hundley Advisors LLC’s Steps (Part 1)

“To start is to succeed.” – Mark Twain

Seeing as how business startups aren’t going out of fashion anytime soon, I’m taking for granted that you’re reading this article because you have an idea.

Most of the time, it’s not the idea that’s the problem, but it’s the idea that creates the problem: how do I go about turning this idea into a business?

That’s what I’m here to help you with today. A checklist of sorts on how to start a small business, with deep dives into areas of my own expertise that probably aren’t yours.

So here’s your list, and then let’s get into what you really need to know about how to start a small business.

Business Planning

Choosing a Business Idea
Conducting Market Research
Creating a Business Plan
Securing Funding for Your Business

Legal Requirements and Business Structure

Legal requirements for business registration
Tax obligations for different business structures
Legal implications of choosing a business structure
Business licenses and permits

Setting Up Operations

Setting Up Operations and Logistics
Developing a Marketing Strategy
Hiring and Managing Employees

Some of these require more explanation than others.

Business Planning

Since your idea is what brought you here, I must ask: have you conducted any market research to see if there is demand out there for it? This could involve mining available statistics online, creating a survey, or hiring a company to do all of that for you.

Mind your budget here – there will be a lot more expenses coming. But still, don’t overlook this.

If your research warrants the next step, here’s a resource to help you write that business plan, which you will absolutely need in order to secure funding. There’s no cookie cutter for how to approach this, but the process to create it will be gold for you down the road.

Like when you need to approach others for funding. Typical sources for this include personal savings, grants, investments, retirement accounts, traditional banks, online lenders, the Small Business Administration, and a host of individual or group investors.

Banks usually come to mind first when your small business startup needs capital. But with higher interest rates and tighter lending these days, it will pay to explore all of your other options.

The next area to cover, tax entity and legal structure, will require more space than I’ve got left here. So I’m going to pause and pick up that part of how to start a small business next week.

Until then, reply back or give me a ring with any questions that have come up for you so far: (973) 940-0175

More to come,

Ethan Hundley

What a Good Chester NJ Bookkeeper Does for Your Business

Fri, 06 Sep 2024 08:59:23 GMT

I’m going to talk briefly here about something I’ve talked about before, but with new developments, you’ll want to know about: the Employee Retention Credit.

(And then I’ll get on to a bookkeeping matter I hope every Chester NJ business owner understands.)

I banged this drum quite a bit in the start of the year because of the IRS’s crackdown and the withdrawal option they made available for anyone who falsely submitted a claim.

Since then, the IRS has continued to investigate the claims and found that a number of them were false. That spells trouble for the businesses that got swept up in the ERC claim craze.

But, the IRS has decided to extend another chance for you to take back that ERC claim. They recently re-opened the claim withdrawal option. And if you know you claimed things incorrectly (or even suspect you did), the voluntary disclosure program should be a high priority for you.

If you’re not sure about your claim and whether you should withdraw it, we’re happy to put our well-trained eyes on it:

And now, a little business owner story time…

When Amanda started her business, she took care of the bookkeeping herself. And she was really good at it.

But then things got more complicated and she got more busy so she hired a part-time bookkeeper. This helped, but the bookkeeper was incorrectly applying the payments to invoices in the books software and things got messy.

So she decided to go back to tracking things herself. But with staff to manage and sales to process and a business to build … you can guess what happened.

Sound like a story you know?

It’s not uncommon for a business’s books to be in various states of disarray. It happens. And you know it’s a problem, but dread what it would involve to get help. What a bookkeeper does, what it would cost, questions that you don’t have answers to… it’s enough to make you want to just maintain the bookkeeping status quo.

Good thing you have me to help you out here…

What a Good Chester NJ Bookkeeper Does for Your Business

“Organizing is what you do before you do something so that when you do it, it is not all mixed up.” – A.A. Milne

Bookkeeping cleanup usually becomes necessary for two main reasons: error and neglect. See how you do on the following little quiz:

Do you have expenses that have been incorrectly entered in QuickBooks?
Do you have expenses or income that hasn’t been tracked at all?
Has an employee ever misclassified an expense?
Ever forget to record a transaction?
Have your business books been reconciled at least on a monthly basis?
Do you audit your financial statements regularly to make sure everything that needs to be recorded, is being recorded?

Whatever your reasons, you might be realizing right now that you’re sitting on a financial mess. This is probably why you’re having a hard time getting an accurate picture of your finances.

So let’s go over what a bookkeeper does during a bookkeeping cleanup that you now know you desperately need.

The general process

Basically, we’re going to sort through your financial records to make sure your bookkeeping software is up-to-date and error-free. This can take some time, especially if your records are extensive or haven’t been looked at in a while.

The process usually starts with reconciling your income records, going one month at a time, then moving onto payroll, expenses, and other business transactions. We’ll check every transaction, compare it with your bank and credit card statements, and make sure everything adds up correctly. This can take anywhere from a few hours to hundreds of hours, depending on the state of your books and the complexity of your business.

And we’ll probably have some questions for you—like how far back do we need to dig, when were your books last reconciled, or specific questions about individual expenses or income.

The goal is to get a clear understanding of what’s needed and what your business does.

Once we’ve sorted through everything, we’ll give you some recommendations for better systems and processes to keep things running smoothly in the future. This might include tips on how to avoid certain errors, how to streamline your bookkeeping tasks, or how to correct inefficiencies in your current setup. Everything is game here.

Documents we’ll need

Bank statements
Payroll records
Expense receipts
Credit card statements
Tax returns
Accounts payable/receivable records
QuickBooks or other bookkeeping software access

Costs to expect

The cost of a bookkeeping cleanup can vary. Some bookkeepers charge an hourly rate, while others might offer a fixed fee for the whole job.

While it might seem like one more expense, remember that businesses with messy books are more likely to face audits. And trust me, the cost of an audit—including fees and potential penalties—can be way more than the cost of cleaning up your books in the first place.

Your options

If you let your books stay the way they are, you’re taking on a lot of risks. You’re more likely to face an audit, your tax filings or refunds could be delayed, and it can hinder your ability to make informed business decisions.

And of course, if you ever want to sell your business or bring on investors, messy books can scare them away. Not to mention the stress for both your staff and yourself, as you’re constantly trying to figure out what’s going on financially.

What a bookkeeper does during a cleanup isn’t just about getting your numbers in order. It’s about protecting your business, making sure you’re compliant with tax laws, and setting you up for smoother operations in the future.

Now that you have a clearer picture of what a bookkeeper does during a books cleanup, you can understand why it’s so essential. If you think your Northern NJ business might need this, don’t hesitate to reach out: (973) 940-0175

Here to help,

Ethan Hundley

How To Close A Business, Legally: Steps for Chester NJ Business Owners

Fri, 30 Aug 2024 08:58:36 GMT

I don’t think Kenny Rogers was thinking about business ownership when he sang that song, but it could be a mantra for Chester NJ business owners.

(And if you’re not a Kenny Rogers fan, here’s a trip down someone else’s lane. Boy, 1978 was another era altogether, wasn’t it?)

Knowing when to hold ‘em – and when to fold ‘em – is a business skill not all possess, and things can unfortunately end badly when you don’t know how to shut things down well (like ending up, according to Kenny, on a train bound for nowhere).

But that doesn’t have to be you. It takes courage to call it quits, and good business counsel to make the best of what’s left.

So when it’s time to lay your cards down, you want to be able to walk away … not run.

Okay okay, I’m done with the song lyrics (for now), but I’m not done advising you on how to close a business the right way.

In fact, I’m just getting started.

How To Close A Business, Legally: Steps for Chester NJ Business Owners

“Quitting is not a failure; it’s simply a decision to stop doing something that isn’t working.” – Tony Robbins

I’m pretty sure they don’t give classes on how to close a business in business school … as if every business owner even went to business school.

So let’s go through the process of how to close a business today, step by step, in the event you find yourself walking down this path in the future.

Of course, you only need to go through this process if you’re not selling, passing the biz off to a family member, or the business is otherwise continuing on in one form or another in your absence.

The dissolution of a business entity should be undertaken with care and attention to detail – this is, after all, a legal process . Here’s what needs to happen to legally end the existence of your business, as a general guideline…

1) Decide and Document: Formally document the decision to dissolve. The first step is, potentially, the hardest one of all. It’s a decision that takes time, and if you’re not a solopreneur, this might involve a board resolution (for corporations) or a member vote (for LLCs). Your entity designation will dictate the formal process to officially call it quits.

2) Tell Stakeholders: Inform relevant entities. Here, we’re talking about informing creditors, employees, suppliers, customers, and any relevant government agencies (IRS, state, licensing agencies, etc.) about the dissolution. Obviously, order is important here for preserving relationships and helping people plan for what’s next.

For banks and suppliers, your notice should include a plan for how you’re going to pay them what they’re owed. For employees, there are legal stipulations to follow regarding appropriate notice and severance pay so be sure you’re compliant there.

And for customers, be sure to provide them with information about any outstanding orders, refunds, or warranties.

3) Pay Your Taxes: File the proper returns and pay the government. The next step in dealing with your financial obligations is to file final tax returns (federal, state, and local) and settle outstanding tax debts. In addition to what your tax returns show, don’t forget about sales tax, employment tax, and any penalties and interest.

It’s in your best interests to work with a tax professional to make sure nothing gets missed here that will come back to haunt you later.

4) Settle Your Debts: Pay everyone else. Then it’s time to pay off all outstanding business debts, including loans and accounts payable. If you’re unable to pay everything in full, you might be able to negotiate with creditors to reach settlement agreements.

Though in extreme cases, bankruptcy may be a viable option to restructure debts or liquidate assets.

5) Distribute Assets: Sell, liquidate, or distribute remaining business assets. This only comes after all outstanding debts have been settled. You can sell or dispose of any remaining inventory and equipment. Any real estate owned by the business can be sold or leased. And don’t forget about intellectual property – transfer or sell any intellectual property assets, such as patents, trademarks, or copyrights.

6) File Articles of Dissolution: Formally tell the state you’re closing. Officially called “Articles of Dissolution” or “Certificate of Dissolution,” this filing will formally dissolve the entity. Pay attention to any deadlines set by your state for the filing of these dissolution documents.

7) Pay Attention To Recordkeeping: Maintain business records for a certain period as required by law. This includes financial records, tax returns, contracts, and employee records. Be sure to follow state and federal laws for specific record retention requirements.

Seek professional help throughout this process for advice and/or physical assistance with filings, communications with government agencies, and the like. The process of how to close your Northern NJ business isn’t a simple one:

(973) 940-0175

Nor is it speedy. Remember, all of this takes time, so don’t expect to wrap up the complete dissolution of your business quickly. It took time to start your business, and shutting it down will be more of the same. Documents take time to be filed and recorded, and assets take time to sell, but eventually, what’s left of the payout (if any) will make its way to your account.

And there’ll be time enough for countin’, when the dealin’s done. ��(I couldn’t resist.)

But all kidding aside, I’ll be here for you too.

Ethan Hundley

Considering the Bookkeeping Accounting Difference In Your Chester NJ Business

Fri, 23 Aug 2024 08:58:02 GMT

Adieu, Summer Olympics 2024. Paris 2024 didn’t disappoint.

Were you like most of the world in watching? It seems like Americans were glued to all 13 days of nonstop competition both on live TV and through the ever-entertaining athlete social media streams .

And speaking of social media, thanks, Olympic committee, for relaxing rules around social media posting which brought us this .

Since most Olympic athletes aren’t superstars like Simone Biles or Usain Bolt, stirring up attention on TikTok and Instagram can mean opportunities for the lesser-known Olympians who don’t make much (if any) money on their efforts.

As a business person, you have to respect their game… Olympic and social media alike. They’re getting their names out there and getting paid for it (hopefully).

And there’s a lesson in that: Building your business presence means getting your name out there. Capitalizing on current trends and letting people see into your world, these are the things that build trust and increase business.

And as you increase business, you’re likely (make that certainly) dealing with one financial need or another. So you need to know where to look for help. Do you need help with bookkeeping or accounting – or both?

Many business owners I talk to don’t actually know the difference between bookkeeping and accounting, and thus, don’t know where to start when they need financial help.

I want to fix that problem for you today with a guide on the bookkeeping accounting difference.

Considering the Bookkeeping Accounting Difference In Your Chester NJ Business

“Risk comes from not knowing what you’re doing.” – Warren Buffett

Let’s go over the main point of difference between bookkeeping and accounting, and then cover some nuances to help you determine what you already have in place and what holes you need to fill.

The primary bookkeeping accounting difference is focus.

Bookkeeping is the process of recording financial transactions, such as sales, purchases, and payments. It involves data entry, categorization, maintaining accurate records, and knowing what questions to ask to make sure all available data is harvested.
Accounting , on the other hand, interprets and analyzes this financial data to provide insights into a business’s financial health. Accountants prepare financial statements, manage taxes, provide financial advice based on the data, and assist with strategic planning.

In essence, bookkeepers are the recordkeepers, while accountants are the financial storytellers. These are simplistic definitions – the roles encompass much more than this – but it can be helpful at times to summarize things in short manner.

Obviously, Northern NJ businesses need both and one can’t be done without the other.

Now for the bookkeeping accounting difference guide to fix the problems in your own operation…

> Do you have a problem with obtaining accurate data to analyze?
Perhaps your data doesn’t accurately reflect what’s going on in the business, or perhaps you have no data even available to analyze. You need a bookkeeper with an eye for detail. This is typically what good bookkeepers are known for.

While often seen as a mere recorder of numbers, bookkeepers are actually the first line of defense on the data accuracy ball field. Errors at this stage can have cascading effects on financial statements and decision-making. Don’t overlook it.

Further, accountants depend on the accuracy of bookkeeping data to perform their analytical functions. Poor-quality bookkeeping can really hinder an accountant’s ability to provide the insights you need to make better business decisions.

> Do you have a problem knowing what to do with your financial data?
You need an experienced accountant to break it all down into understandable insights and actionable takeaways.

Some examples of what an accountant can do with the data your bookkeeper provides:

revenue and expenses analysis to assess profitability
cash flow examination to evaluate a company’s liquidity
debt-to-equity ratio calculation to measure financial risk
inventory turnover numbers to gauge efficiency in managing stock
customer payment cycle analysis to assess collection effectiveness
industry benchmarks to compare a company’s performance to competitors.

> Do you have a problem finding someone who knows your business well enough to provide informed financial support?

You likely need both a bookkeeper and an accountant to cross this bridge.

Bookkeepers can play a crucial role in understanding the narrative behind the numbers. When they’re familiar with day-to-day operations (interacting with clients, knowing how the business operates, etc.), their ability to know what questions to ask and where to look for data provides the context necessary for the accountants asking the follow-up questions.

And as technology advances, accountants are becoming more involved in the strategic decision-making you were after to begin with. Data analytics, predictive modeling, financial optimization – all the fun stuff.

Financial advisory professionals really do work together to make sense of all of the numbers for you. While the bookkeeping accounting difference is nuanced, it’s also designed as a partnership with business owners, helping you move forward with knowledge – and confidence.

Knowledge and confidence that is worth its weight in gold.

Here for you,

Ethan Hundley

Better Sales Strategies to Reach Your Chester NJ Customers

Thu, 15 Aug 2024 08:57:36 GMT

One of the best things about this summer has been watching the Paris Olympics. When an American athlete pulls out a win, it feels like a win for all of us. Case in point: Noah Lyles taking the gold in the men’s 100m dash. That’s an event where Americans haven’t seen a gold medal in over 20 years.

But, also, seeing St. Lucia and Dominica win their first ever medals elicits all the feels too. You can’t help but cheer for that kind of accomplishment.

There’s a high involved in watching the best of the best compete. It’s one of those things you don’t want to end.

And even though it’s August, and summer is winding down, the upbeat vibe of these warmer months means your Chester NJ customers are still in a good mood and ready to buy. So let’s talk about sales strategies to capitalize on that mood for your business.

Effective follow-up strategies and communication can separate you from your competition in today’s market so let’s talk specifics on how to do that well.

Better Sales Strategies to Reach Your Chester NJ Customers

“The most important thing is to listen to the customer. If you listen carefully, the customer will tell you exactly what they want.” – Zig Ziglar

Sales strategies (that work) start with a good offer. And your offering is only as good as the ease in which you can describe it. Easier said than done, my friend.

This note will help you fix yours.

So check your current offer and see how it measures up against these five elements that will make your offer more compelling and your sales strategies more effective.

1) Clear pricing (that reflects your worth)

When meeting with prospective clients, address pricing in a straightforward way. By being transparent with your pricing, you’re providing clear expectations AND building trust. Clients appreciate consistency, and dodging the topic can seem, well, dodgy.

As for your rates – these should be based on the real value of your services. Then stick to them confidently, which actually provides credibility.

2) Multiple payment options

Consider the cost of smartphones. Despite their sky-high prices, mobile companies offer varied payment plans that make these gadgets more accessible.

Think in that vein as you elevate the value of your services with flexible payment options. You’re broadening your appeal and meeting expectations of the modern buyer.

Practically, allow your customers to choose how they pay, whether in a single payment or through an installment plan. Expand the avenues through which they can settle their bills – be it via phone, online, by mail, etc.

And don’t forget to explore mobile payments – a trend that not only meets customer expectations but also streamlines the payment process.

3) Short and sweet

When you’re interacting directly with clients, can you explain what you offer in 10 words or fewer? Perhaps 20? If not, it’s time to work with your team to craft a concise elevator pitch. When you have this ready, you can clearly present your value proposition when the opportunity arises.

And then online, prep straightforward and readable content. Make sure your website or digital platforms have clear descriptions, including upfront pricing.

4) Easy to accept

This part isn’t rocket science. Just include your contact information in any and all offerings – online or in-person. It should be easy to get in touch with you.

5) Follow up

It should go without saying, but once a prospect reaches out, actually respond. And quickly.

By doing so, you’re demonstrating your commitment to serve but also increasing your chances of turning them into a dedicated customer. Every interaction is an opportunity to transform casual interest into loyal enthusiasm. Make the most of it.

The summer months present a unique opportunity for businesses. With the warmer weather and a generally upbeat atmosphere, people are more inclined to make purchases. So this is the perfect time to fine tune and be creative in how you communicate your (newly improved) offerings.

We are dedicated to your Northern NJ business’s success. We care just as much about your top line sales strategies, as we do your bottom line profits.

Cheering you on,

Ethan Hundley