"It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something." - Franklin D Roosevelt

If you measure your key metrics you can manage the performance of your business, AND you can see problems well in advance of when they might show up in revenue or profit figures.

Each and every business has key performance metrics [Key Performance Indicators (KPI's)], some of which are common to other businesses, some are industry-specific, and some companies create their own KPI's.

These sort of things are our bread and butter, when working with small businesses tax pro.

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Financial metrics are often common to all businesses. Some examples include:
* Average transaction value.
* Gross profit margin.
* A measurement of a company's efficiency during the production process.
* How much is left over after COGS.
* Gross Profit divided by Total Revenue.
* Net profit percentage.
* The amount of profit for every $1 of revenue generated.
* Net Profit divided by Total Revenue multiplied by 100.
* Debtor days or receivable turn days.
* How long your customers take to pay you. (The sooner your customers pay, the sooner you can get that cash working for you.)
* 365 (days in the year) divided by (Sales on credit or invoice divided by Average Accounts Receivable).

More industry-specific KPI's might include:
* Table turns per night.
The number of times a restaurant is able to sit customers at a table.
* Utilization.
The number of hour ... Read More…

  

"A man should always consider how much he has more than he wants." -Joseph Addison 

The financial picture for the various states in our nation is a mishmash of various revenue sources (and expenses). 

Unlike, say, the federal government, the states cannot print money. So, they are forced to go hunting for it. And they get it from a few primary sources: sales tax (based on purchases/consumption), income tax (individual and business taxes based on income), property tax and "other" taxes like the tax on fishing licenses, driver's licenses and a lot of other smaller items.  

And the most volatile -- and COVID-affected -- of these sources is ye olde income tax. Sales tax has obviously taken a hit as well (but people still need to buy stuff) and property taxes, well ... more about that next week. 

So which states will be hunting for more revenue? This article will give you a good picture -- it's a breakdown for which states are the most reliant upon income tax revenue: 

https://taxfoundation.org/state-individual-income-tax-reliance-2020/ 

Oregon and Maryland stand out (especially Oregon, which has no sales tax) -- but MANY states will be on the hunt for that sweet, sweet green. 

You are your state's "economic stimulus plan". Make no mistake ... the next couple years will find MOST states finding ways to grab revenue from you. 

This will take the form of increased property taxes (which you can fight), increased scrutiny of business operations that cross state lines (for ... Read More…

 

"Oh, my friend, it's not what they take away from you that counts. It's what you do with what you have left." - Hubert Humphrey

As difficult as it might be right now, let's project forward to next year.

Let's cross our fingers and believe that we all get through this donkey of a year that is 2020.

Maybe you have a business that clung to life, and you're headed towards recovery in 2021. You took the PPP, or perhaps the EIDL (or both). Or perhaps you had to take unemployment for a period of time, but are slowly (but surely) getting back on your feet. The economic stimulus checks helped.

But then ... taxes are due.

Uh oh.

Well, don't fear my friend: Janet Behm is here to set your mind at ease.

Let's start with the economic stimulus payments. Those are easy -- they're completely tax-free.

But things get trickier with unemployment benefits. Those are, in fact, taxable income. Depending on your state, you can elect to have tax withheld from those payments ... and if you're currently receiving these benefits, you will need to plan to pay taxes on it (depending on your total income, and other deductions, of course).

For the students, what about student loan forgiveness? Well, it depends on how you are receiving that forgiveness assistance. Employer-paid student loan repayment assistance is tax-free through 12/31/20 (per the CARES Act). Any other student loan forgiveness programs are taxable.

I recently covered mortgage forbearance. This and other debt forbearance program ... Read More…

 

It feels to me that we're all in need of some good news.

I have some great news for the young (ish) and the old (ish), but before I get there, I'd like to encourage EVERY person who is reading this:

Keep your head in the game.

Yes -- we can so easily get caught up in seemingly nefarious schemes on every side. Whether you are Team ReOpen or Team StayLockedDown ... there are data points and new stories plentifully available to bolster your case.

But what are you doing about what YOU can control?

That's the game right now.

Many people receive these emails that I send out. But of all of them, in point of fact, there might be only a small handful that have actual power to enact change by influencing minds or implementing action.

So, what are all the rest of us doing?

When we argue on Facebook or shake our collective fists at the wind, we are merely creating yet more noise.

Let's raise our game. Let's be the people who pull one another out of the pit and provide tangible help and encouragement.

This is a difficult season for everyone, including our political leaders. Believing the best, let's focus on the things within our control and leave the arguing to the small-minded and easily distracted.

We have better things to do.

Like -- saving money!

First ... some good news for the young (particularly those with student loans):

The new CARES Act indicates that you do NOT need to pay interest or ANY payments on eligible student loans for six months. (!)

Effective 3/13/2 ... Read More…

 

Anytime (like now) that there is a rollout of government assistance, you can count on two things:

1)    Bumps in the road (it's hard to manage many millions of people needing help)

2)    SCAMS

I haven't yet heard of any of my clients or friends being taken in by this stuff, but I did want to alert you to this dynamic.

How to make sure your check is the right check.

Most of the Economic Impact Payments (i.e. stimulus checks) have been direct deposited by now. So if you have NOT received it, you might want to check the status using the tool the IRS has set up here:

https://www.irs.gov/coronavirus/economic-impact-payments

Some who did not set up direct deposit, or for other reasons, might receive a check instead. That said, a couple things to note:

First, as with tax refunds issued by check, there's always the possibility that crooks could steal the relief payments from their curbside mailboxes.

Second, some scammers have created fake stimulus checks. This is the latest variation of the bogus government payment scam that's been around for years. Criminals send fake checks to their scam victims, advising them to quickly deposit the checks. Then the second part of the scam kicks in, with the crooks telling their prey that the checks are too large.

Since they "got more than they were due", the recipients of the fake checks need to send back part of the money. Yep, send the alleged excess back to the crooks who issued the worthless counterfeit checks in the first place! ... Read More…

 

I'd like to simplify things for you today.

There is so. much. noise. right now about how to survive (even thrive) in the midst of this very difficult season.

"Pivot" they say.

And yes, if you are running a business, these times call for a bit of a shift. Only a very small amount of businesses haven't been affected in some serious way by this ongoing crisis, and if you need somebody else to tell you to pivot at this point, chances are good that you are already in trouble.

I've already been writing to my clients a great deal about this dynamic, and I hope you have been finding these messages helpful. We will continue to be out in front on these matters, simply because things are constantly changing, and we are uncovering new information and new benefits (and how to receive them).

It's all getting very complicated.

That's why I hope you see why I'm working so hard to be in communication with you right now. 

So we do ask for your patience, as we tap our inside sources for the REAL information, wade through all of the new guidance being put out by the IRS, and dive into the CARES Act for the panoply of new credits, benefits and assistance details that were jammed into that massive bill.

So again ... if you need small business help, what I'd like to simplify and break down are the five primary ways you and your business can get help right now. Plus a bonus...

The "bonus" method, of course, is us. We're in your corner, as always.

So, let's break down the five other ways ... Read More…