American healthcare is poised for some pretty radical changes over the next several years – changes that are relevant to everyone from the youngest child to the oldest retiree. If you’re a small business owner or an employee of a small business, you’re probably wondering whether the new laws and regulations will impact you. Read on to learn about potential changes to your insurance and healthcare premiums.

Changes Starting in 2010

The upcoming healthcare changes will be phased in over the next few years. Although the bulk of the new regulations are slated for 2011, 2013, and 2014, there are two significant changes taking place in 2010.

During the period of 2010-2013, as the new regulations are gradually introduced, qualified small business owners are eligible for a tax credit of 35% on their contributions to health insurance premiums for their employees. Known as the Small Business Health Care Tax Credit, this perk is available only to small business with fewer than 25 employees and average wages of less than $50,000 annually.

In addition, parents will now be permitted to include adult children (up to age 26) on the coverage offered by tax-qualified, employer-provided health plans.

Changes starting in 2011

From 2011-2015, small business employers will be eligible to receive federal funding if they provide their staff with wellness programs.

Small businesses will also be permitted to form collectives or alliances in order to purchase employee health insurance policies at better rates. The online programs that will make this possible, known as SHOP or Small Business Health Options Programs, will receive state-level funding from federal sources.

You can also expect to see some more specific changes to permissible medical expenses. The definition of qualified medical expenses will be altered to exclude over-the-counter medications. This affects all Health Savings Accounts (HSAs) and Archer Medical Savings Accounts (MSAs), as well as reimbursements through Health Flexible Spending Arrangements (Health FSAs) and Health Reimbursement Arrangements (HRAs). The annual limit on allowable medical expenses from flexible spending accounts will be capped at $2,500.

Finally, a “cafeteria plan,” which allows employees to pick and choose benefits as needed, will be introduced for small business staff and the self-employed beginning in 2011.

We’ll explore some more details on the upcoming healthcare changes in our next post.

• Budgets and Business Planning: Whether you’ve just launched a new business or own an existing corporation, seeking the advice of an experienced CPA can be very helpful in establishing realistic budgets and benchmarks for your business. A strategic plan can make the difference between success and failure in today’s marketplace; a CPA can help you set business goals, establish checkpoints to measure progress, and take measures to encourage growth within your company.
• Assistance with Bonding: Bonding and taxes have different objectives, and a CPA can help you navigate the two areas to achieve the consistency that is favored by bonding agents, increasing your chances of a money-saving tax return.
• Profit and Cost Assessment: In order to understand and improve upon your current business structure, it’s necessary to monitor your systems and consider the costs and benefits of various types of work. A CPA can be helpful in analyzing the profits and costs of various contracts, products, and services you offer, and can give advice on which of these services are most lucrative and which are costing more labor and overhead than they’re worth. This kind of assessment can help you streamline your work to focus on your most productive areas.
• Internal Controls: These can encompass anything from elaborate checks and balances to discourage fraud, to a simple streamlining of your company’s paperwork to make you more efficient. A CPA with experience in your industry can advise you on the best internal controls for your business.
• Technology and Software Support: Your CPA can be an important resource in advising you on any changes you need to make to the technology or software you need to run your business. He or she can suggest software that can improve your financial outlook, and may be able to tell you about compatible technology in other areas.

A CPA is an invaluable team member for any business. Tap into their diverse range of skills to support your company’s growth, stability, and success.

1.  Do you have the best clients?

Reevaluating your client list is probably the first thing to look at when planning your future year. Your marketing plan should focus on the best client fit for you. If the current client list does not fit your focus, think about whether or not you should keep particular clients. Follow the 80/20 rule in these matters. If 80% of your stress comes from 20% of a particular client then reevaluate whether keeping them is worth the trouble. You will need room for the new clients coming in 2010.

2. Are your products and services the best out there? If not, what should you do to improve?

Take a step back and ask a few of your valued customers. They are sure to be honest and will give you some insight into your business. Look at the services that produce the most return on their investment and focus on those. How do you know which products and services are doing the best? Financial analysis or reviewing your books for that information is the easiest and most efficient way.

3.  Are you losing time on different projects? Are we missing critical moments that are costing the company money and time?

Review current systems to see if there are inefficiencies. Flowchart them or put them on a piece of paper and then tear the system apart. Bring your team in to evaluate them with you. You never know what ideas will come out of this analysis that could save you thousands of dollars.

4.  Have you evaluated your strengths and weaknesses, opportunity and threats?

It’s called a SWOT analysis. This analysis can help you decide on which areas need to be focused on most. This should be done at least once a year.

5.  Are you totally lost at this point and feeling all alone? Do you have so many issues you don’t know where to begin?

You need a business coach to help you get through the hard stuff. Business or Executive Coaching is a great way to keep business owners motivated and moving. They keep you accountable for making progress and can give you tons of helpful hints, ideas and development opportunities.

In 2010, businesses that do the hard work now will definitely reap the benefits and will be more successful. Ultimately, you will have to ask a lot of questions of yourself and others before you can have a realistic view of the future. Your bookkeeping and financial records can answer the important ones that matter most. If you’re confused how they can help or don’t know where to begin, please give us a call. We can help.

Although there’s no surefire way to bullet-proof yourself against a tax audit, a good CPA can help make the process less painful by offering helpful tips like these:

1. Keep records for at least the past three years. The IRS typically initiates audits within 18 months of a filing, but by law they have up to three years before the statute of limitations ends. By having all of your forms and receipts organized and easily accessible, you’ll greatly reduce stress in the event of an audit. When you work with a CPA, you’ll receive all of the year’s tax documents neatly packaged for your files.
2. Avoid math mistakes. Although a numbers blunder doesn’t necessarily mean you’ll be audited, honest mistakes can result in increased attention from the IRS, which is rarely a good thing. A CPA will check all calculations meticulously before submitting your return.
3. Acknowledge red flags before the IRS does. If you have an unusually large deduction or another anomaly, include copies of all related documentation to head off any confusion or suspicion. The IRS agent examining your return will recognize your efforts to remain compliant.
4. Be cooperative. Remember, an auditor is just doing his or her job. If you react belligerently, you could be opening yourself up to closer scrutiny. Clearly and politely answer the questions that are asked of you, but don’t volunteer additional information. When you treat the auditor with respect, you’ll most likely find the experience to be less unpleasant than you anticipated. One of the bonuses of working with a CPA is that he or she will negotiate directly with the IRS on your behalf.

Facing a tax audit can be scary, but you don’t have to do it alone. Above all, the most effective tool you can have is a qualified CPA. A certified tax professional can guide you through the process, address your questions and concerns, and prevent common pitfalls, all of which will help you get through the ordeal with the least possible amount of pain and hassle.

If you think an accountant’s role is limited to preparing and filing annual tax returns, it’s time to adjust your expectations. Many of our new clients are pleasantly surprised to find out how much work we’re prepared to take off their plate.

One of the biggest mistakes business owners can make is withholding information from their CPAs. While basic financial data— W2 and 1099 forms, real estate interest statements, receipts for business expenses—is important, we dig deeper to ensure a clear understanding of our clients’ businesses and long-term goals. Below are some of the most important things to convey to your tax professional before tax season:

• Major life changes. These can apply to your personal or professional life. Examples of events to share with your accountant include the merger or sale of a business, the purchase of a new property, or an impending divorce or marriage. Any of these things can impact the distribution of your business profits.
• Projected income changes. Whether you anticipate fiscal challenges or you’re about to launch a revolutionary new product that promises to boost your revenue, it’s wise to let your accountant know what you’re expecting. Your CPA can help with any cash flow or re-investment concerns.
• Retirement goals. Do you have a timetable for when you’d like to retire? As a self-employed entrepreneur, are you unclear on the differences between a traditional IRA and a Roth IRA? Regardless of your age, it’s never too early—or too late—to discuss retirement options with your CPA.
• New projects or investments. If your business is venturing into new markets or about to start offering a new product or service, this change in direction could have an impact on your tax strategies.

As you approach tax season, a well-informed CPA is one of the most important business tools in your repertoire. The more your tax advisor knows about your current situation and long-term plans, the better he or she can help you achieve your personal and professional goals.

You wouldn’t set off on a cross-country journey without your GPS system—so why risk navigating the sometimes turbulent waters of business ownership without a qualified tax professional to guide you?

Considering the proven benefits of hiring a Certified Public Accountant, it’s surprising that a significant number of business owners don’t use one. What’s stopping them? Below are a few of the most common reasons we’ve heard, along with some facts to set the record straight.

Excuse #1: “I built my business from the ground up. Surely I can handle filing a tax return.”

While it’s true that the most basic tax returns can be completed with relative ease, a CPA’s services go well beyond filling out a few forms and sending them to the IRS. A good accountant will provide financial guidance throughout the entire year, not just during busy tax season. He or she will help you create a long-term strategy for growth and success, looking beyond the numbers to identify the unique challenges and goals of your business.

Some entrepreneurs and start-up business owners are used to doing everything themselves, and that “DIY” mentality can extend to their taxes. While it can be tempting to try and save some money by taking care of your own accounting needs, it’s important to understand that enlisting the services of a CPA doesn’t mean you’re incapable—to the contrary, it signifies that you care enough about your business to invest in its growth and dedicate more resources to essential areas.

Excuse #2: “I’ll just go online or buy a book to find all the tax information I need.”

Although there is extensive information available on the Internet and in tax books, no amount of singlehanded research can replace the benefits of a personal relationship with a CPA. When you meet with a tax professional, he or she will be able to get a clear picture of your goals and challenges, analyze the nuances of your situation, and make a customized recommendation. While knowledge and education are essential, they’re most effective when combined with a face-to-face consultation that’s driven by YOUR individual needs.

Excuse #3: “My business isn’t big enough to warrant a CPA.”

It’s a common misconception that only very large, lucrative businesses need a CPA. The truth is, companies of all sizes and profit margins can benefit from the services of a tax professional. An experienced CPA can help with all aspects of your business financials—tax returns, bookkeeping, payroll, financial analysis, in-depth reporting, and more. This will allow you to dedicate more resources to revenue-boosting activities, such as marketing strategies, product development, and client satisfaction.

Excuse #4: “I can’t afford to hire a CPA.”

Considering the significant tax and efficiency savings provided by a good CPA, a more accurate statement would be “I can’t afford NOT to hire a CPA.” With our reasonable rates and value-adding services, our professional tax services are a no-brainer investment in the success of your business.