Steven Brewer & Company News & Content
This generation doesn’t wait for a paycheck. They create income on their own terms. Selling products online. Editing videos for clients. Running social media accounts. Picking up freelance work between classes or jobs. It’s flexible. It’s fast. And in a lot of cases, it works. But there’s one part no one really talks about: Most of it isn’t being tracked—or taxed—correctly. And that mistake doesn’t show up right away… it shows up later, all at once. The New Income Reality (That No One Really Explains) For Gen Z, income rarely comes from just one place. It’s usually a mix: A part-time job A few freelance clients Money from a side hustle Payments from apps or platforms Maybe even a little creator income Individually, none of it feels like a big deal. But combined? It absolutely is. Because from a tax perspective, it’s all income—and it all needs to be accounted for. Where Things Start to Go Wrong The problem isn’t effort. It’s that no one really teaches this. So a lot of people assume: “If it’s small, it doesn’t matter” “If I didn’t get a form, I don’t need to report it” “I’ll deal with it when I file” That last one is where most issues start. Because by the time you “deal with it,” the decisions that mattered have already been made. Mistake #1: Not Tracking Income Clearly When money comes in from multiple places, it’s easy to lose track. A few payments here. A deposit there. Something paid through an app that you forget about. But over time, it adds up. And without a clear record: You don’t know what you actually earned You can’t report accurately You’re more likely to miss income At the same time, many platforms are now reporting earnings directly. So if your numbers don’t match what’s reported… That’s when problems start. Mistake #2: Ignoring Estimated Taxes This is where most first-time earners get caught off guard. If you’re making money without taxes being withheld—like freelance work, side gigs, or creator income—you’re expected to pay taxes throughout the year. Not just once at filing. These are called estimated tax payments. And if you skip them, you may end up with: Penalties Interest A much larger bill than expected It’s not obvious—but it’s important. Mistake #3: Misunderstanding Write-Offs Write-offs get talked about a lot online. But they’re often misunderstood. A write-off isn’t: Everything you buy Anything loosely related to your work A way to avoid taxes entirely It has to be both: Ordinary and necessary for what you do. For example: A content creator can deduct editing tools or software A freelancer can deduct business-related subscriptions An online seller can deduct inventory costs But guessing—or copying advice from social media—can lead to mistakes. Mistake #4: Overlooking How Income Is Reported Today The way income is tracked has changed. More transactions are being reported: Payment apps Online platforms Digital marketplaces And in some cases, things like crypto or digital assets can also trigger reporting requirements. In other words: There’s less room for things to go unnoticed. Which makes it even more important to stay organized from the start. Why This Matters Earlier Than You Think Getting this wrong once? Usually fixable. But when it keeps happening, it builds: Back taxes Penalties Stress Missed opportunities to save The good news? Gen Z has an advantage most people don’t: Time to get this right early. The Opportunity: Build Good Habits Now When you understand your income and taxes early, you: Keep more of what you earn Avoid surprises at tax time Make better financial decisions Build confidence as your income grows It doesn’t have to be complicated. But it does have to be intentional. Final Thought Earning money in new ways is a huge opportunity. But without structure, it can also create unnecessary problems. The goal isn’t to overcomplicate things— It’s to get the basics right early, so everything gets easier as you grow. If you (or someone in your family or team) is earning income from multiple sources and is not sure how it all fits together, we're here for you. The earlier you get this right, the easier everything becomes. Request your free quote from Steven Brewer & Company CPAs today!
Hiring feels like growth. More people. More capacity. More momentum. But here’s what most business owners underestimate: The salary is just the starting point. By the time you factor in everything else, that “$70,000 hire” can quietly become a $90,000—or even $100,000—decision. And if you don’t plan for it? Hiring can slow your business down instead of moving it forward. Why Hiring Feels Simpler Than It Actually Is On paper, hiring looks straightforward. You need help. You set a salary. You make the offer. But the real cost doesn’t show up in the offer letter. It shows up in everything that comes after. The True Cost Breakdown (What Most People Miss) Salary is only one piece of the equation. Here’s what actually gets added on: 1. Payroll Taxes Employers are responsible for their share of: Social Security and Medicare Federal and state unemployment taxes That alone can add 7–10%+ on top of base salary. 2. Benefits (Even Basic Ones Add Up) Depending on your setup, this may include: Health insurance contributions Retirement plans Paid time off Even modest benefits packages can significantly increase your total cost per employee. 3. Software, Tools, and Equipment Every new hire needs access to: Software subscriptions Systems and platforms Equipment or workspace Individually small. Collectively meaningful. 4. Management and Training Time This is the most overlooked cost. New hires require: Onboarding Training Ongoing management Which means someone on your team is spending time not doing their core work. That’s a real cost—even if it doesn’t show up on a payroll report. Full-Time vs. Contractor: Not Always an Obvious Choice Hiring full-time isn’t always the best first move. In many cases, a contractor or fractional role can: Reduce upfront costs Eliminate benefit obligations Provide specialized expertise Give you flexibility as you grow This is why more businesses are turning to: Fractional CFOs Outsourced marketing teams Contract-based specialists It’s not about avoiding hiring. It’s about hiring intentionally. When Hiring Actually Hurts Growth It sounds counterintuitive—but hiring too early can create pressure instead of relief. Here’s how it happens: Revenue isn’t consistent yet Cash flow tightens Fixed payroll costs increase You feel pressure to “feed” the hire Instead of freeing you up… It adds stress to every decision. Growth doesn’t just come from adding people. It comes from adding people at the right time. A Smarter Approach to Hiring Decisions Before you make your next hire, ask: Is this role tied directly to revenue or efficiency? Can this function be outsourced first? Do we have consistent cash flow to support this long-term? What is the fully loaded cost—not just the salary? Because clarity here protects you later. What Strong Businesses Do Differently They don’t just hire when they feel busy. They hire when the numbers support it. They: Forecast the full cost Understand the ROI of the role Use flexible resources when needed Scale their team strategically—not reactively That’s what keeps growth sustainable. Final Thought Hiring is one of the biggest investments you’ll make in your business. Done right, it accelerates growth. Done too early—or without a full picture—it can slow everything down. The difference isn’t instinct. It’s clarity. Before your next hire, run the numbers—not just the salary. Contact Steven Brewer & Company CPAs today to evaluate the true cost of hiring, explore smarter staffing options, and make confident decisions that support long-term growth.
June 2026 Individual Due Dates June 1 - Final Due Date for IRA Trustees to Issue Form 5498 Final due date for IRA trustees to issue Form 5498, providing IRA owners with the fair market value (FMV) of their IRA accounts as of December 31, 2025. The FMV of an IRA on the last day of the prior year (Dec. 31, 2025) is used to determine the required minimum distribution (RMD) that must be taken from the IRA if you are age 73 or older during 2026. June 10 - Report Tips to Employer If you are an employee who works for tips and received more than $20 in tips during May, you are required to report them to your employer no later than June 10. You can use IRS Form 4070 or your own statement that includes your signature; name, address and Social Security number; employer's name (or establishment's name if different) and address; month or period the report covers, and total of tips received during that month or period. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 8 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed. June 15 - Estimated Tax Payment Due This is the last day to timely make your second quarter estimated tax installment payment for the 2026 tax year. Our tax system is a "pay-as-you-earn" system. To facilitate that concept, the government has provided several means of assisting taxpayers in meeting the "pay-as-you-earn" requirement. These include: Payroll withholding for employees; Pension withholding for retirees; and Estimated tax payments for self-employed individuals and those with other sources of income not covered by withholding. When a taxpayer fails to prepay a safe harbor (minimum) amount, they can be subject to the underpayment penalty. This penalty is equal to the federal short-term rate plus 3 percentage points, and the penalty is computed on a quarter-by-quarter basis. Federal tax law does provide ways to avoid the underpayment penalty. If the underpayment is less than $1,000 (the "de minimis amount"), no penalty is assessed. In addition, the law provides "safe harbor" prepayments. There are two safe harbors: The first safe harbor is based on the tax owed in the current year. If your payments equal or exceed 90% of what is owed in the current year, you can escape a penalty. The second safe harbor is based on the tax owed in the immediately preceding tax year. This safe harbor is generally 100% of the prior year's tax liability. However, for taxpayers whose AGI exceeds $150,000 ($75,000 for married taxpayers filing separately), the prior year's safe harbor is 110%. Example: Suppose your tax for the year is $10,000 and your prepayments total $5,600. The result is that you owe an additional $4,400 on your tax return. To find out if you owe a penalty, see if you meet the first safe harbor exception. Since 90% of $10,000 is $9,000, your prepayments fell short of the mark. You can't avoid the penalty under this exception. However, in the above example, the safe harbor may still apply. Assume your prior year's tax was $5,000. Since you prepaid $5,600, which is greater than 110% of the prior year's tax (110% = $5,500), you qualify for this safe harbor and can escape the penalty. This example underscores the importance of making sure your prepayments are adequate, especially if you have a large increase in income. This is common when there is a large gain from the sale of stocks, sale of property, when large bonuses are paid, when a taxpayer retires, etc. Timely payment of each required estimated tax installment is also a requirement to meet the safe harbor exception to the penalty. If you have questions regarding your safe harbor estimates, please call this office as soon as possible. CAUTION: Some state de minimis amounts, safe harbor estimates rules, and the dates estimate payments are due are different than those for the Federal estimates. Please call this office for particular state safe harbor rules. June 15 - Taxpayers Living Abroad If you are a U.S. citizen or resident alien living and working (or on military duty) outside the United States and Puerto Rico, June 15 is the filing due date for your 2025income tax return and to pay any tax due. Those impacted by the terrorist attacks in Israel throughout 2024 and 2025 have until September 30, 2026, to file and pay taxes that are otherwise due on or after September 30, 2025, and before September 30, 2026. The Sept. 30, 2026 extension also applies to time-sensitive tax acts that were previously postponed by IRS. If your return has not been completed and you need additional time to file your return, file Form 4868 to obtain 4 additional months to file. Then, file Form 1040 or 1040-SR by October 15. However, if you are a participant in a combat zone, you may be able to further extend the filing deadline (see below). Caution: This is not an extension of time to pay your tax liability, only an extension to file the return. If you expect to owe, estimate how much, and include your payment with the extension. If you owe taxes when you do file your extended tax return, you will be liable for both the late payment penalty and interest from the due date. Combat Zone - For military taxpayers in a combat zone/qualified hazardous duty area, the deadlines for taking actions with the IRS are extended. This also applies to service members involved in contingency operations, such as Operation Iraqi Freedom or Enduring Freedom. The extension is for 180 consecutive days after the later of: The last day a military taxpayer was in a combat zone/qualified hazardous duty area or served in a qualifying contingency operation, or has qualifying service outside of the combat zone/qualified hazardous duty area (or the last day the area qualifies as a combat zone or qualified hazardous duty area), or The last day of any continuous qualified hospitalization for injury from service in the combat zone/qualified hazardous duty area or contingency operation, or while performing qualifying service outside of the combat zone/qualified hazardous duty area. In addition to the 180 days, the deadline is also extended by the number of days that were left for the individual to take an action with the IRS when they entered a combat zone/qualified hazardous duty area or began serving in a contingency operation. It is not a good idea to delay filing your return because you owe taxes. The late filing penalty is 5% per month (maximum 25%) and can be a substantial penalty. It is generally better practice to file the return without payment and avoid the late filing penalty. We can also establish an installment agreement, which allows you to pay your taxes over a period of up to 72 months. Please contact this office for assistance with an extension request or an installment agreement. Weekends & Holidays: If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. Disaster Area Extensions: Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites: FEMA: https://www.fema.gov/disaster/declarations IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations June 2026 Business Due Dates June 15 - Employer's Monthly Deposit Due If you are an employer and the monthly deposit rules apply, June 15 is the due date for you to make your deposit of Social Security, Medicare, and withheld income tax for May 2026. This is also the due date for the nonpayroll withholding deposit for May 2026 if the monthly deposit rule applies. June 15 - Corporations Deposit the second installment of estimated income tax for 2026 for calendar year corporations. Weekends & Holidays: If a due date falls on a Saturday, Sunday or legal holiday, the due date is automatically extended until the next business day that is not itself a legal holiday. Disaster Area Extensions: Please note that when a geographical area is designated as a disaster area, due dates will be extended. For more information whether an area has been designated a disaster area and the filing extension dates visit the following websites: FEMA: https://www.fema.gov/disaster/declarations IRS: https://www.irs.gov/newsroom/tax-relief-in-disaster-situations Are you looking for a CPA? Steven Brewer & Company is here for you! Request a quote with us today!
When a “Good Year” Still Feels Tight You finally have a year where sales are up and the books show a profit—yet your bank account feels like it missed the memo. You’re working harder than ever, but cash seems to disappear the moment it hits your account. If that sounds familiar, you’re not doing anything wrong—you’re just bumping into one of the most common challenges in business: confusing profit with cash flow. Profit tells you how your business looks on paper.
Cash flow shows how your business feels in real life. And while both matter, only one pays the bills. The Real-World Disconnect Here’s where the confusion usually starts: You invoice a client for $20,000 in December. On your profit and loss statement, that sale boosts your year-end numbers. But if the client doesn’t pay until February, that profit doesn’t do much to help you cover January’s rent, payroll, or taxes. Or imagine a landscaping company that buys $15,000 of equipment in spring to prepare for summer jobs. On paper, the expense is spread out over time—but in reality, that cash leaves your account today. The result? You’re profitable on paper but short on cash in practice. Why This Happens to So Many Business Owners Cash flow issues aren’t a sign of failure—they’re often a natural part of growth. When your business scales, so do your expenses, payment cycles, and timing gaps between money in and money out. The biggest triggers include: Delayed payments: Clients pay on their schedule, not yours.
Seasonal swings: Slow months still have fixed costs.
Inventory or supply purchases: You pay upfront, earn later.
Tax surprises: Profit may be taxable long before the cash arrives.
Without planning for those timing gaps, even healthy businesses can feel like they’re running on empty. Turning Chaos Into Control This is where working with a trusted financial professional can make all the difference. They can help you: Forecast cash flow so you see slowdowns before they happen.
Smooth out seasonality by building cash reserves during strong months.
Review expenses strategically to make sure growth doesn’t outpace available cash.
Even simple steps—like syncing invoicing and bill-paying schedules or setting aside a percentage of each payment for future expenses—can dramatically reduce stress and improve stability. Bottom Line Profit is your scoreboard. Cash flow is your oxygen.
You need both to survive—and thrive. If your business feels profitable on paper but tight in the bank, you’re not alone. Contact our firm today for guidance on building a cash flow plan that keeps your business strong through every season.
Considering bringing on a partner? While there are certainly benefits you want to make sure you consider all aspects of such a relationship and look to the long term. Here are five of the best reasons (Pro’s) to organize a business as a partnership, explained in practical, plainEnglish terms: THE PRO’S 1. Shared Capital and Resources A partnership allows multiple owners to pool money, assets, and resources, making it easier to start or grow a business than going alone. Partners can contribute cash, equipment, property, or intellectual property Reduces the financial burden and risk on any one individual Often improves credibility with lenders and suppliers 2. Complementary Skills and Expertise Partners can bring different strengths and experience to the business. One partner may excel at operations, another at sales or finance Better decisionmaking through multiple perspectives Division of labor increases efficiency and focus This is especially valuable in professional services, startups, and small businesses. 3. Simple and Flexible Structure Partnerships are generally easy to form and operate compared to corporations. Fewer formalities and lower startup costs Minimal ongoing compliance requirements Partnership agreements can be customized to fit the owners’ needs Assets can be moved in and out of the partnership with little or no tax implications. This flexibility allows partners to define roles, profit sharing, and management however they choose. 4. Pass Through Taxation Most partnerships benefit from passthrough taxation, meaning: The partnership itself does not pay federal income tax Profits and losses pass directly on to the partners’ personal tax returns Avoids the “double taxation” faced by many corporations This can simplify tax reporting and, in some cases, reduce the overall tax burden. 5. Shared Risk and Responsibility Running a business involves uncertainty, and partnerships help spread risk. Financial losses are shared according to the partnership agreement Emotional and operational pressure is divided among partners Partners can support each other during difficult periods For many entrepreneurs, not having to shoulder everything alone is a major advantage. THE CON’S Here are five of the strongest reasons not (Con’s) to organize a business as a partnership, especially when compared with an LLC or corporation: 1. Unlimited Personal Liability In a general partnership, each partner is personally liable for the business’s debts and obligations. Personal assets (home, savings, investments) can be seized to satisfy business debts Each partner can be held liable for the actions of other partners One partner’s mistake or lawsuit can financially harm everyone Organizing as a Limited Liability Company (LLC) partnership would limit or may eliminate this personal liability. This is often cited as the single biggest drawback of partnerships. 2. Joint and Several Liability for Partner Actions Each partner acts as an agent of the partnership. One partner can legally bind the business without the others’ consent Poor decisions, negligence, or misconduct by one partner affect all partners Disputes with vendors or customers can expose every partner to risk Even highly trusted partners can unintentionally create legal exposure. 3. Potential for Conflict and Management Disputes Partnerships often fail due to internal disagreements, not business performance. Differences in work ethic, vision, or priorities can cause tension Decisionmaking authority may be unclear or contested Resolving disputes can be costly and disruptive Without a strong partnership agreement, disagreements can quickly escalate. 4. Limited Continuity and Stability Most partnerships lack perpetual existence. The partnership may automatically dissolve if a partner leaves, retires, becomes disabled, or dies Ownership transfers are often restricted or complicated Investors and lenders may view partnerships as less stable This can make longterm planning and growth more difficult. 5. Harder to Raise Capital and Attract Investors Partnerships are often less attractive to outside investors. No easily transferable ownership interests like corporate stock Investors may avoid exposure to partnership liability Growth options are more limited compared to LLCs or corporations As a result, partnerships can struggle to scale beyond a certain size. The Agreement A key factor in any successful partnership is its operating/partnership agreement. A good agreement will lay out specific information, purpose, requirements, expectations, responsibilities, how much capital is to be raised and by whom, allocations of profits, losses and distributions, duties and obligations of the partners to the partnership and each other, possible compensation, how new partners are let in and how partners are allowed to withdrawal. You must also consider possible issues that may happen and have a contingency plan to address such things as; how partnership interests are handled, dissolution of the partnership, dispute amongst partners resolution and other items must be addressed in the agreement should a problem arise. Such an agreement can be a very complex document due to all the things that should be addressed so consulting an attorney knowledgeable in partnership law is crucial. Each state has its own requirements thus the attorney needs to make sure the agreement will comply. Also, the IRS itself has things which it wants to see in the agreement. Before any operating/partnership agreement is signed, it should be reviewed by an attorney, each of the partners and a tax professional to see that it is in compliance with all rules and regulations and the partners, themselves, agreed to be bound by it. Before you make the final decision on whether a partnership structure is right for you and your business associates, sit down with a tax professional and an attorney to discuss each of these good and bad reasons. Looking for a financial partnership that thrives on building strong relationships with their clients? Call Steven Brewer today at 812-883-6938 to schedule an appointment. Accountability and results in growing your business.
Discover how pay-as-you-go workers comp insurance improves cash flow, boosts accuracy, and simplifies payroll for small businesses. Learn how it works.
Inflation isn’t gone—it’s just quieter. Around 3% feels tame compared to the chaos of the past few years, but that doesn’t mean it’s harmless. For most business owners, small shifts in pricing, payroll, and supply costs have become the new normal—slow, steady pressure that eats into margins one percentage point at a time. But here’s the thing: inflation doesn’t just erode profit. It also creates permission. Permission to reprice. Permission to renegotiate. Permission to rethink how your business makes money. And as we head into year-end—when every business is reviewing budgets, forecasts, and compensation plans—now’s the perfect time to turn inflation from a problem into a strategic opportunity. The Inflation Mindset Shift: From Defense to Offense Most owners treat inflation like a storm to wait out. They hunker down, cut costs, and hope the economy stabilizes. But smart firms? They play offense. Inflation gives you the perfect narrative to reset pricing, refine operations, and re-anchor value with your clients or customers. Think about it: when everything costs more—from raw materials to insurance—people expect prices to adjust. That makes this moment the cleanest window you’ll get to implement changes that were overdue anyway. Step 1: Reprice With Confidence, Not Apology The biggest mistake small businesses make is treating price increases like confessions. “Sorry, but our costs went up.” Instead, reframe it as value alignment: “We’ve upgraded our processes, improved delivery, and invested in technology to serve you better.” Even if your costs are rising, your value probably has too. If your last price review was more than 18 months ago, you’re already behind. Inflation gives you cover to fix that. Step 2: Audit Margins and Cash Flow Before You Budget Before you finalize 2026 budgets, run a true margin audit. Which services or products are still profitable at today’s costs?
Which are borderline or underwater?
Which clients consistently underpay for the value delivered? Then connect that data to your cash flow forecast. A business that plans around real margins—versus assumptions—has control. If you haven’t reviewed vendor contracts lately, this is also your chance to lock in rates before potential tariff shifts or supply cost changes next year. Step 3: Forecast Smarter, Not Just Harder Forecasting isn’t about predicting inflation—it’s about being ready for it. Smart firms use 3-scenario forecasting: Best case: Inflation drops further, demand grows.
Base case: 3% inflation continues, steady but modest growth.
Stretch case: Tariffs increase, costs rise, and cash flow tightens. By modeling each, you build agility—not anxiety—into your business plan. Step 4: Align Compensation and Value Creation Inflation doesn’t just affect costs—it affects expectations. Employees feel it too. As you plan 2026 compensation, think about rewarding value creation instead of just cost-of-living bumps. For example: Introduce profit-sharing to align team success with performance.
Offer flexible benefits like health stipends or hybrid schedules—high perceived value, lower cost.
Communicate transparently about financial goals. Most teams handle reality better than silence. Step 5: Protect Profitability Before It’s a Problem When inflation was at 8%, you could blame it for shrinking profits. At 3%, it’s just math. That means you can’t afford to ignore the incremental hits—subscription creep, silent vendor increases, underpriced legacy clients. The businesses that thrive in 2026 will be the ones that use this “quiet inflation” window to: Trim inefficiencies before they compound.
Rebuild reserves.
Reinvest in tools that save time or improve margins (think automation, AI, or better client systems). The Big Idea: Inflation as a Reset Button You can’t control the economy—but you can control how your business responds to it. Inflation isn’t a crisis anymore. It’s your chance to reset the rules—on pricing, partnerships, and profitability. When you treat inflation as an opportunity, not a threat, you stop playing defense and start leading from strength. Ready to Plan Your 2026 Strategy? Now’s the time to review pricing, forecasting, and compensation plans before the new year begins. If you want to make 2026 your margin expansion year—not another squeeze—contact our firm. We’ll help you analyze your numbers, refine your strategy, and move into the new year with confidence and control.
Growth Feels Great—Until It Doesn’t At first, running your business feels simple: money comes in, bills go out, and if there’s something left over, you’re doing fine. Then growth happens.
More clients. Bigger projects. Higher payroll. Maybe even a second location. Suddenly, cash doesn’t flow the way it used to. You’re booking record sales, but your bank balance looks… thin. You’re working harder than ever, yet the pressure to make next week’s payments feels heavier. Welcome to the paradox of growth: the bigger your business gets, the tighter cash flow can feel. Why Growing Businesses Feel Cash-Poor It’s not bad management—it’s math. As revenue grows, so do: Accounts receivable: Clients take longer to pay larger invoices.
Inventory or project costs: You spend cash weeks (or months) before you earn it back.
Payroll: Growth usually means more people—and payroll hits like clockwork, even when customer payments don’t.
Taxes: Higher profits mean higher estimated payments that pull cash out of your account quarterly.
Growth stretches the timing gap between money going out and money coming in. Without a system to monitor and forecast it, you’re flying blind. The Shift: From Bookkeeping to Cash Flow Strategy Most small businesses start with simple bookkeeping: track what you earned, record what you spent, file the taxes. But once you grow, you need something more— cash flow management that looks ahead, not just backward. That’s where financial professionals make all the difference.
They can help you: Forecast inflows and outflows weeks or months in advance.
Spot cash gaps early—and plan around them.
Build reserves for seasonality or growth spurts.
Model “what-if” scenarios (new hires, equipment purchases, expansions) before you commit. In other words, they help you turn growth from a guessing game into a system. Real-World Example: The Busy-but-Broke Dilemma One of our clients doubled revenue in a year—then almost ran out of cash. Why? Every big new contract required more up-front costs and staff before payments arrived. Once we mapped cash flow month by month, they saw the problem clearly. With a few tweaks—changing invoice terms, adjusting payroll timing, and setting up a short-term credit line—they moved from panic to predictability. The revenue didn’t change. The system did. Bottom Line Growth brings opportunity—but it also brings complexity. What used to fit on a spreadsheet now needs structure, foresight, and strategy. If your business is growing fast but cash feels tight, it’s time to move beyond basic bookkeeping.
Contact our firm today to build a cash flow plan that grows as smart as you do.
Are you ready to make the move? Are you looking for someone to help you grow your business? A CPA firm who cares about not only your business but you as a person? A firm which can bring insight into your business? One that looks out for your best interests while keeping you compliant with all the IRS, state and other financial regulations? If so, we are looking for you! Steven Brewer & Company, CPAs, is brick and mortar office with a strong virtual presence. We are looking for the right clients to join us. Currently we work with over 35 companies in 20 states. We know how to work virtually with our clients. We work to help you understand your business; help you plan for the future and use your business assets in planning for the best results in building your future. If you are looking for all of this, give us call (812-883-6938) or drop us an email (admin@stevenbrewercpa.com) to schedule a meeting to discuss your financial needs. In the meantime, check out our website, stevenbrewercpa.com, to find out more about us.
As the year draws to a close, small business owners find themselves in a crucial period for financial organization and tax strategy optimization. With the potential to significantly reduce your 2025 tax bill, implementing effective tax strategies now becomes imperative. By maximizing savings, managing cash flow, and ensuring compliance with tax deadlines, you can position your business more robustly for the upcoming year. Taking decisive action before December 31 is essential. To assist you in this critical period, here’s a year-end tax planning checklist to help small businesses take control and uncover valuable tax-saving opportunities. Buy Equipment and Other Fixed Assets: One of the most effective ways to generate tax deductions is to buy equipment, machinery and other fixed assets needed for the business and place them in service by Dec. 31. Ordinarily these assets are capitalized and depreciated over several years, but there are a few options for deducting some or all these expenses immediately, including: - Section 179 Expensing - This break allows you to deduct up to $2.5 million ($1.25 million if filing married separate) in expenses for qualifying tangible property and certain computer software placed in service in 2025. It’s phased out on a dollar-for-dollar basis to the extent Sec. 179 expenditures exceed $4 million. Section 179 expensing allows businesses to immediately deduct the cost of certain qualifying property, rather than depreciating it over time. This includes tangible personal property purchased for use in an active trade or business, such as machinery, equipment, and off-the-shelf software. Certain improvements to nonresidential real property, like roofs, HVAC systems, and fire protection systems, also qualify. However, buildings and structural components generally do not qualify unless they fall under the category of "qualified real property," which includes specific leasehold, restaurant, and retail improvements. The property must be used more than 50% for business purposes and placed in service during the tax year the deduction is claimed. - Bonus Depreciation - Bonus depreciation saw a significant enhancement due to legislative changes made by the OBBBA, which increased the depreciation rate to a full 100% for qualifying property purchased after January 19, 2025. Previously set at 40% for 2025, this change, which OBBBA made permanent, enables businesses to immediately deduct the entirety of the cost of qualifying property in the year it is placed in service, providing a powerful tax-saving tool. Qualified property for bonus depreciation includes tangible personal property with a Modified Accelerated Cost Recovery System (MACRS) recovery period of 20 years or less, most computer software, certain leasehold improvements, and specific transport utility property. This depreciation benefit applies to both new and used assets acquired and placed in service after the designated date, offering businesses increased flexibility in managing their capital expenditures. - De Minimis Safe Harbor - The de minimis safe harbor rule offers an opportunity to directly expense certain low-value items used in your business, bypassing the usual process of capitalizing and depreciating them as fixed assets. If your business maintains applicable financial statements, you can write off expenses of up to $5,000 per item or invoice for these purchases, assuming they're also expensed for accounting purposes. Without such financial statements, the cap is lowered to $2,500. Despite its "de minimis" label, this provision allows for substantial immediate deductions. For instance, purchasing ten computers at $2,500 each could enable you to claim an upfront deduction of $25,000. Year-end Inventory Management: Year-end inventory plays a significant role in determining a business's profit or loss as it directly affects the Cost of Goods Sold (COGS), which is a critical component of calculating gross profit. Cost of goods sold (COGS) is calculated as the beginning inventory plus purchases during the year minus the ending inventory. Thus, the value of the ending inventory directly reduces the COGS. A higher ending inventory results in a lower COGS, which increases gross profit and taxable income. Conversely, a lower ending inventory results in a higher COGS, reducing gross profit and taxable income. Here are some year-end strategies: Identifying and writing down obsolete or slow-moving inventory at year-end can lead to reductions in taxable income, as the inventory's reduced value is recognized as a loss. Delaying inventory purchases until after year-end, businesses can manage their COGS and effectively reduce taxable income, thereby optimizing their financial results for the current year. Contributing to a Retirement Plan: Retirement plan contributions not only offer significant tax advantages but also facilitate future savings for both business owners and employees. For self-employed individuals, contributing to a retirement plan such as a Simplified Employee Pension (SEP) IRA can be highly beneficial. Business owners can contribute up to 25% of their net self-employment earnings, with a maximum contribution of $70,000 for 2025. The advantage of a SEP IRA is its flexible contribution deadline, which extends until the tax return filing date, offering additional planning time. For sole proprietors, freelancers, and independent contractors, a Solo 401(k) presents an excellent opportunity due to its dual-role contribution system, where you are considered both employer and employee, allowing for substantial contribution limits. This makes it an ideal choice for maximizing retirement savings. Additionally, employers can enhance employee satisfaction and retention by offering year-end bonuses and retirement plan contributions, which are often deductible. This dual benefit of tax savings and employee incentive strengthens both the company's financial position and workforce stability. Maximize the Qualified Business Income (QBI) Deduction: As the year-end approaches, business owners should take strategic steps to maximize the Qualified Business Income (QBI) deduction (also known as the Sec 199A deduction), a vital tax benefit allowing up to a 20% deduction on qualified business income. To optimize this deduction, first review your income levels to ensure they fall below the $197,300 for single filers or $394,600 for joint filers threshold (2025 amounts) to avoid phase-outs. Adjusting a “working shareholder’s” W-2 wages appropriately, aligning with industry standards while considering IRS scrutiny, is essential for businesses structured as S corporations. Making capital investments can enhance deductions through Section 179 expensing or bonus depreciation, effectively lowering business income. Review Accounts Receivable for Bad Debts: As year-end approaches, business owners should evaluate their accounts receivable to consider writing off bad debts, which can provide valuable tax deductions. A bad debt is an uncollectible amount owed to your business, often arising from unpaid customer invoices or unreturned loans, and is categorized as either business or nonbusiness. To qualify for a business bad debt deduction, the debt must have been previously included in your business's income, and it should be related to regular business operations. For accrual method taxpayers, these debts are deductible in the year they become worthless. Documenting diligent collection efforts and the debt's worthlessness is crucial for IRS compliance. Effective management of bad debts not only cleans up financial records but also optimizes taxable income, ultimately enhancing your business’s financial health. Consult with a tax advisor to ensure you take full advantage of this deduction as part of your year-end tax strategy. Pre-Pay Expenses : As the year-end approaches, business owners can strategically manage their cash flow by prepaying expenses to reduce taxable income and, consequently, tax liability. By accelerating deductible business expenses such as insurance premiums, office supplies, or marketing costs before December 31st, you can effectively lower this year’s taxable income. This is especially beneficial for businesses using the cash accounting method, where expenses are deducted in the year they're paid. Prepaying up to 12 months of expenses, allowed under the IRS’s safe harbor rule, can be an effective way to pull deductions into the current tax year, provided income can be appropriately deferred without jeopardizing cash flow needs. Deferring Income: Deferring income to the following year can keep a business under certain tax thresholds, thus optimizing tax outcomes. For cash basis taxpayers, delaying client billing until after the new year means that income is counted when received. However, careful consideration is required to ensure that deferring income won't adversely affect business operations or relationships. Balancing these strategies allows business owners to manage their taxable income actively, ensuring smoother cash flow and potentially significant tax savings. First Year in Business? If so, you can elect to deduct up to $5,000 of start-up and $5,000 of organizational expenses in the first year of a business. Each of these $5,000 amounts is reduced by the amount by which the total start-up expense or organizational expense exceeds $50,000. Expenses not deductible in the first year of the business must be amortized over 15 years. Avoid Underpayment Penalties: If you are going to owe taxes for 2025, you can take steps before year-end to avoid or minimize the underpayment penalty. The penalty is applied quarterly, so making a fourth quarter estimated payment only reduces the fourth-quarter penalty. However, withholding is treated as paid ratably throughout the year, so increasing withholding at the end of the year can reduce the penalties for the earlier quarters. Here are some possible solutions: - If you have a qualified retirement plan, a temporary solution to address the under- withholding is to take an unqualified distribution from a qualified retirement plan, utilizing this as a temporary solution to address withholding shortfalls. Upon taking the distribution, 20% is automatically withheld for federal income taxes, providing an opportunity to catch up on required tax payments and avoid underpayment penalties. Meanwhile, you can mitigate tax implications by rolling over the full amount of the distribution, including the withheld portion, back into the plan within the 60-day window. This maneuver requires the use of other funds to cover the withheld amount during the rollover but allows for maintaining the tax-deferred status of the retirement savings and ensures compliance with rollover rules. This approach offers a unique yet viable method to align tax payments without incurring additional tax liabilities on the distribution. - If you are married and your spouse is employed, the spouse can increase withholding for the end of the year. Even withhold as much as the entire paycheck with the help of a cooperative employer. - If you have other sources of income subject to withholding, have the withholding increased appropriately. It may be beneficial for you to consult with this office to estimate your underpayment and whether an underpayment penalty exception might apply. Are You a Working Shareholder in an S Corporation? If so, you may not be aware of the IRS’s “reasonable compensation” requirements, which can influence your Section 199A (qualified business income) deduction and your payroll taxes. Reviewing the requirements as they apply to your circumstances may avoid future problems with the IRS. Planning on Paying Your Employees a Bonus? Consider paying your employees their bonuses before year-end, rather than after the start of the new year. That way you benefit from the tax deduction a year sooner. Reassess Your Business Entity: The end of the year is a smart time to evaluate whether your current business structure is still the best fit for your operations. Each structure has unique tax and liability implications. Options include sole proprietorships, partnerships, limited liability company, S Corporation and C Corporation. Conclusion : While year-end strategies primarily aim to manage and reduce income tax liabilities, it's important to remember their wider financial benefits. Implementing these strategies can also diminish the burdens of self-employment tax and business payroll taxes. By shifting income, optimizing deductions such as the Qualified Business Income (QBI) deduction, and making strategic investments or prepayments, businesses can decrease taxable income to more favorable levels, thus lowering associated tax obligations across the board. Such comprehensive tax planning not only enhances cash flow but also strengthens the financial position of the business, paving the way for a more robust and tax-efficient new year. As you finalize your year-end financial strategies, consider consulting with this office to ensure you maximize these opportunities across all tax dimensions.