Individual Income Tax Essentials

• Permanent extension of the 2017 TCJA individual tax rates
  Standard deduction amounts remain elevated
  State and Local Tax (SALT) Deduction
• SALT cap $40,000 (for incomes under $500,000) for 2025 through 2029.

New Temporary Deductions (2025‑2028)

• Tip income deduction: up to $25,000 per taxpayer (phase‑outs begin at AGI > $150,000 individual / $300,000
• Overtime pay deduction: up to $12,500 (phase‑outs at same AGI thresholds)\
• Auto loan interest for domestically assembled vehicles

Social Security Benefits

• Seniors receive a new deduction of $6,000 (single filers ≤ $75,000; joint ≤ $150,000) (estimated 88% will no longer owe tax on benefits)

Small Business & Pass‑Through Owner Provisions

• Small Business (QBI) deduction retains and permanently extends the 20% deduction rate
• Section 179 expensing cap raised to $2.5 million, and 100% bonus depreciation is restored for qualifying assets starting in 2025.

Estate and Gift Tax Exemption

• Increased to $15 million per person/$30 million joint, permanently extending the 2017 level.

Clean Energy and Related Policy Roll‑Backs

• Many clean energy tax credits created under the Inflation Reduction Act have been repealed or phased out, reducing incentives for renewable energy investments. 

Education, Student Loan, and Long-Term Care Impacts

• Federal private school voucher tax credit—a dollar-for-dollar credit for donations to scholarship organizations.
• Grad PLUS and Parent PLUS loan caps introduced

Health and Welfare Cuts

• Medicaid spending cut by approximately 12%, likely affecting state program and funding.
• SNAP work requirements expanded

Planning Considerations & Next Steps

• Withholding/estimates - Consider adjusting to account for tip/overtime and auto-interest deductions, especially if you may exceed AGI phase‑outs
• QBI & Business Expensing - Evaluate expanded expensing thresholds and bonus depreciation timing to maximize 2025 benefits
• Social Security Recipients - Assess whether seniors can optimize new deductions to reduce taxable benefits
• Estate & Gift Planning - With increased exemption thresholds, revisit trust and lifetime gifting strategiesInvestment & Energy Strategies - Reevaluate renewables investment stance in view of reduced energy credits

If your situation involves retirement considerations, estate planning, start-up ownership, or education funding, please let us know—we’d be happy to prepare a version of this summary tailored to your unique circumstances.

Feel free to reach out to schedule a mid‑year planning review. We will continue to monitor IRS guidance and Treasury regulations as they are released in the coming weeks.

Permanent Business Rate and QBI Deduction

• Sec. 199A remains permanent and unchanged, offering up to 20%† deduction on pass-through income.

Bonus Depreciation & Section 179 Expensing

• 100% bonus depreciation is permanently restored for property acquired after January 19, 2025 (Sec. 168(k)), with a phase‑out beginning in 2026
• Section 179 expensing cap doubled—from $1.25M to $2.5M, effective immediately Business

R&D Expense Expensing

• Mandatory amortization of domestic research & experimental (R&E) expenditures is repealed. Businesses may now deduct R&E costs immediately, or elect to amortize over five years starting with taxable years after December 31, 2024
• Non-domestic R&D must still be capitalized over 15 years

Qualified Small Business Stock (QSBS) Expansion

• For stock acquired after July 4, 2025, the QSBS gain exclusion cap increased to the greater of $15M or 10× basis, up from a prior $10M cap.
• New graduated exemption tiers: 50% tax-free after 3 years, 75% after 4, and 100% after 5 years of holding, encouraging earlier company liquidity events

International Tax Changes

• The OBBBA renames GILTI to Net CFC Tested Income (NCTI) and FDII to Foreign‑Derived Eligible Income (FDDEI).
• The deduction rate increased to 40% for NCTI and 33.34% for FDDEI for tax years after December 31, 2025.

Business Credits and Deductions

• The Paid Family & Medical Leave Credit (Sec. 45S) becomes permanent (12.5–25% of qualifying employee wages for up to 12 weeks).
• Certain employer-sponsored meal expenses (e.g., on fishing vessels) become fully deductible after 2025, rather than limited to 50%.
• Dependent Care  Assistance Exclusion (IRC § 129) permanently increased to $7,500, with child & dependent care credit rate boosted to 50% (effective 2026).

Planning Considerations & Next Steps

• Asset Acquisitions - Leverage high Section 179 and bonus depreciation limits now–through 2029
• R&D Spending - Decide between full expensing or five-year amortization elections
• Equity Compensation / QSBS - Consider timing of stock issuances and hold periods to maximize tax-free exclusions
• International Operations - Reevaluate foreign income structuring under updated NCTI/FDDEI rules
• Family Leave Programs - Employers may benefit from the now‑permanent leave credit—act proactively
• Employee Benefits - Increase employer‑provided dependent care benefits where applicable

Mid‑year strategy sessions should be considered and determine how best to manage and prepare for the effects of these changes.

We will continue to monitor IRS and Treasury guidance as these new provisions are implemented. Please reach out at 603-329-6408  if you’d like individualized tax planning or projections based on your specific circumstances.

Predicting what we will owe each year before the year is complete can be complicated, and sometimes it can seem unfair to owe penalty on taxes that are not really due yet, however the authority has been granted to to the IRS to make sure we are paying tax obligations throughout the year, which is basically a normal process for most employed individuals.

The estimated tax process is designed to have the same "throughout the year" effect.

Why Do I owe Estimated Taxes?

Most taxpayers owe estimated tax payments when they:

• Paid estimates in the prior year to cover tax.
• Had a balance due for the prior year.
• Project that their taxes withheld will not cover a certain percentage of the prior year tax.

Are Estimated Tax Payments Required?

Payments are required to reduce or eliminate underpayment penalties, however these amounts are not considered due for IRS collection purposes until the statutory deadline for paying tax (normally April 15 for individual filers).  The minimum threshold for estimated tax is $1,000 federally and varies by state.

How Much Should I Pay?

Federally, there are two safe-harbors which can help you to avoid potential penalties, so long as you pay enough to cover your tax obligation (estimates, withholdings and other payments):

• 100% (110% if AGI >$150,000 ) of the prior year tax
• 90% of the current year tax

*If your income is significantly variable throughout the year, or if you have specific circumstances where a one time income event occurs during the you may qualify for a different schedule using “annualization” or “seasonal” installments

How are the Penalties Calculated?

First determine your balance due without respect to estimates paid. In most cases, 25% is due each quarter… and the penalty must actually be computed separately for each quarter.

The penalty is a function of rate/365, published quarterly and multiplied by the 25% amount and again by the number of “late days.”

e.g. Assume only withholdings were paid during the year & a $1,000 balance is due by April 15, 2024 (day 366 per IRS tables), simply subtract the quarterly due date from the payment date, to calculate the “late days.”

• Apr 15, 2023 is day 0 and 366 days late
• Jun 15 is day 61 is 305 days late
• Sept 15 is day 153 is 213 days late
• Jan 15, 2024 is day 275 is 91 days late

Penalty calculates to $48.82 as follows:

• Q1 $250 x .07/365 x 366 = 17.54
• Q2 $250 x .07/365 x 305 = 14.62
• Q3 $250 x .08/365 x 213 = 11.67
• Q4 $250 x .08/365 x 91 = 4.99

What about State Estimates?

Each state has their own rules around estimates and you should check with your state revenue agency, however in most cases, interest rates are slightly higher (normally +1%) and the amount is 

Additional Resources for State information regarding estimated taxes

Can I Pay Electronically?

Most agencies encourage electronic payment and will keep a history for you. We recommend that you retain your receipts and verify your bank records to confirm your payments clear.  Below are a few local state resources.

When Are Payments Due?

In most cases for calendar year individuals, your payments are due on the 15th of the April, June, September and January (of the following year).  However, some states have due dates requiring a December payment, such as New Hampshire for business related taxes.

Links to Resources Related to Estimates

Internal Revenue Service
IRS Tax Payments

Massachusetts
Mass Tax Connect

New Hampshire Interest & Dividends Tax
New Hampshire Business Tax
Granite Tax Connect

Maine 104ES-ME
Maine EZ Pay

Connecticut CT-1040ES
MyConneCT

Vermont Estimated Tax
MyVTax

Rhode Island RI-1040ES
RI Online Payments

Due Dates Have Changed!

Original Post Below

Beneficial Ownership Information - New Reporting Requirements

The Department of Treasury is requiring Beneficial Ownership Information reports to be filed beginning January 1, 2024.  This requirement is born out of the Corporate Transparency Act of 2021 to bulwark against financial crimes.

We advise every statutory entity evaluate its compliance requirements with respect to this Act and related rules to avoid potential criminal and civil penalties for violations can be up to $500 per day not filed and/or $10,000 and two years imprisonment.

Fact Sheet

Do I have to File?

Unless you are exempt, you more than likely have to file a BOI with FinCen by the due date, based on when your entity was created.

Deadlines

Entity created:

1. Prior to January 1, 2024 - by January 1, 2025
2. After January 1, 2024 to December 31 - 90 calendar days from creation date
3. After January 1, 2025 - 30 calendar days from creation date

Ownership Change Occurs:

1. Within 30 calendar days

Common Exemptions

• Exempt Organization
• Non Statutory Entity (not an LLC or Corporation)
• Large Operating Entity (meeting all 6 criteria)
• 21 other less common exemptions

Large Operating Entities

(must meet all criteria)

1. More than 20 full time employees working in the United States
2. Maintains a physical operating presence in the US
3. Files either of the following federal income tax returns (1120, 1120-S or 1065) showing more than $5,000,000 in gross receipts (consolidated if applicable) or sales, net of any sources outside of the United States.

Other Exemptions

Most of the other exemptions require a detailed analysis of your particular operating structure.  A full list of exempt statutory entities can be found below.

1. Securities reporting issuer
2. Governmental authority
3. Bank
4. Credit union
5. Depository institution holding company
6. Money services business
7. Broker or dealer in securities
8. Securities exchange or clearing agency
9. Other Exchange Act registered entity
10. Investment company or investment adviser
11. Venture capital fund adviser
12. Insurance company
13. State-licensed insurance producer
14. Commodity Exchange Act registered entity
15. Accounting firms (SOX Registered)
16. Public utility
17. Financial market utility
18. Pooled investment vehicle
19. Tax-exempt entity
20. Entity assisting a tax-exempt entity
21. Large operating company
22. Subsidiary of certain exempt entities
23. Inactive entity

How do I File

FinCEN has provided a compliance guide and dedicated a web page for FAQs and News Updates to assist you in determining:

• Who are a beneficial owners
• Whether your company has to report it's company applicants
• What "specific" information is needed to be reported
• When to file initial reports?
• When to report changes and correct inaccuracies

As of the writing of this post, FinCEN has not provided for the ability for Companies to begin the process of filing, which will open on January 1, 2025.  The compliance guide above contains a checklist for to assist you in preparing information to be ready to file.

Required Information Checklist

Below is a list that can also be found in the compliance guide, available on theFinCen BOI website.  It is not intended to be conclusive and you should review your individual requirements on a case by case basis and refer to any changes requested by FinCEN.

Reporting Company

… Full legal name
… Any trade name or “doing business as” (DBA) name
» Report all trade names or DBAs.
… Complete current U.S. address
» Report the address of the principal place of business in United States, or, if the reporting company’s principal place of business is not in the United States, the primary location in the United States where the company conducts business.
… State, Tribal, or foreign jurisdiction of formation
… For a foreign reporting company only, State or Tribal jurisdiction of first registration
… Internal Revenue Service (IRS) Taxpayer Identification Number (TIN) (including an Employer Identification Number (EIN))
» If a foreign reporting company has not been issued a TIN, report a tax identification number issued by a foreign jurisdiction and the name of such jurisdiction.

Each Beneficial Owner and Company Applicant
Not all reporting companies are required to report information about company applicants. See Chapter 3 for assistance in identifying whether your company is required to report company applicant information.

… Full legal name
… Date of birth
… Complete current address
» Report the individual’s residential street address, except for company applicants who form or register a company in the course of their business, such as paralegals. For such individuals, report the business street address. The address is not required to be in the United States.
… Unique identifying number and issuing jurisdiction from, and image of, one of the following non-expired documents:
» U.S. passport
» State driver’s license
» Identification document issued by a state, local government, or tribe
» If an individual does not have any of the previous documents, foreign passport

• Aggressive marketing and direct solicitations of third party companies are using the “suspension” test to qualify for the Employee Retention Credit.
• Taxpayers may make improper evaluations, where guidance is complex and unclear.
• Contingent fees from certain companies are generally due before the credit is received, which may take six to eighteen months or longer.
• Amending prior year returns and/or filing Administrative Adjustment Requests (AARs) is required.
• Cumulative costs of ERC credit claims are not fully considered with respect to (1)claiming the credit (2) audit representation (3) audit failure.

K2N is receiving many inquiries relative to the Employee Retention Credit and the influx of marketing claims and direct solicitations which may be making aggressive claims and should give you some pause in order to address certain considerations that need to be taken into account when engaging these companies.  The IRS will be increasing examinations in this area and is warning taxpayers to take appropriate steps to avoid unnecessary risks. Many third party “credit firms” are utilizing publicly available information to determine your employee counts and Paycheck Protection Program (PPP) loans to estimate “maximum” potential credits without any analysis.

There are two primary tests that apply to most companies with respect to the ERC:

• Gross Receipts Decline (GRD) - revenues decreased by the applicable statutory percentage.
• Business Suspension Test  (BST) - government order or “more-than-nominal” business impact.

Which Test Should I Use?

GRD - All companies should consider analyzing whether or not they qualify under the GRD.  Generally this test is very straightforward and if your company was able to operate without interruption and you lost revenue, you can generally determine available credits by using the services from your books and records, PPP Forgiveness application, as well as from your payroll company.  Using a third party that bases its fees on contingency may not be the most economical option when claiming under GRD, especially if you have excellent substantiation for your claim.  For detailed information on the thresholds for each year, you should review the IRS page on ERC.

BST - If certain quarters do not qualify under GRD, you can consider the BST, but things can get tricky.  Two conditions must be met:

• You must be mandatorily subject to a government order in effect.
• A “more-than-nominal impact” impacted business operations due to “suspension” or “modification”.

It is important to be cautious with liberal interpretation of what would cause a company to be “subject to” a government order or experiencing a “more-than-nominal” impact.  Specialized knowledge may be necessary to make these determinations as well as what periods may be applicable.  The IRS has provided some guidance, but generally competent legal analysis should be sought when considering the BST and a full understanding of all potential costs.

Considering All Costs and Assessing Risks

While it is different for everyone, the potential amount for an ERC may be substantial even if you received wage-offsetting PPP funds.  However, costs and risks are not always fully considered before pulling the trigger.  Here are just a few questions you should ask and things to consider.

• How long has the third party credit company been in business?
• What is the level of audit protection offered?
• When is the contingency fee due and is it reversible if the credit does not survive audit?
• Are audit defense representation costs covered by the third party fee?
• Are penalties and interest related to erroneous claims and audit adjustment, including underpayments of payroll taxes which can be substantially covered by the third party fee?
• Have professional costs, penalties and interest related to amendments been considered as well as AARs for partnerships?
• Are there downstream amendment and AAR costs directly to owners of pass-through entities and tiered ownership structures?
• Taxes on the credit income is due prior to receiving the credit proceeds.
• What is the risk of not having available funds to repay the credit?
• Will statutes be in place to permit re-amendment should the Company not survive audit?

Amendments and AARs

When a company claims the ERC, the tax treatment of the credit is treated as a reduction in the amount of payroll tax deduction claimed by the filer and as a result tied to the year with which the credit is associated.  Presently the IRS requires amendments to either or both 2020 and 2021 tax years.  AARs impact partnership filings subject to the Centralized Partnership Audit Regime.  These are complicated and generally impact the year in which they are filed, while calculating the tax, interest and applicable penalty will be considered back to the impacted year.

Audit Failure Costs

The potential of not surviving always exists.  As listed above companies should evaluate not just refunding the credit and potential penalties, interest, defense and amendment costs, but timing risk also exists.  Congress extended the statute of limitation for assessment of payroll tax returns on which the ERC is claimed to five years (Sec. 3134(l)).  It is possible that an audit may occur while the statute of limitations for amending a return runs out.  As a result another unanticipated audit costs is having to be stuck with the additional tax paid on income created by claiming the credit in the first place.

Final Thoughts

All considerations mentioned above are important but we strongly advise that companies utilize any resources they can to make an informed decision and consider all risks and costs when using the BST test to justify an ERC claim.  In addition, not all guidance  may be final at the time of this writing or at the time of your claim, so it is important to stay current with changes in this area at the time of your analysis and through the statute of limitations period.

Reporting Personal Use of Automobiles & Lease Inclusions

• Income inclusion amounts on shareholder W2s or reduced lease deductions for proprietors.
• Maintain mileage logs to determine business use deductions.

Reporting Personal Use of Automobiles & Lease Inclusions

• Income inclusion amounts on shareholder W2s or reduced lease deductions for proprietors.
  Maintain mileage logs to determine business use deductions.
• W2 Reporting for 2% Shareholders in S-Corps
  Health, dental, vision, AD&D and certain qualified long-term care premiums (not subject to medicare and fica).
  Other fringe benefits (may be subject to FICA and Medicare) may include certain awards, adoption assistance, moving expenses, and personal use of employer provided property or services.

Updating Data Accuracy for W9  and W4 Forms

Send letters and check records of vendors and employees ensure addresses, tax identification and social security numbers when you prepare 1099s and W2s.

Bonuses

Ensure bonuses were paid by end of the year in order to be deductible.  If you are accrual based, make sure they are paid within 75 days after year end.  Contact your payroll provider to determine deadlines and any specific needs for large amounts.

Documentation and Readiness

Contact a K2N advisor to help create a planning list, determine status of your ledgers and documentation needed for year end preparation services.  Assess your assets, collect documentation from loans, vehicle purchases, review your inventory valuation and dispose of obsolete items.

Journal Entries

Contact a K2N team member and make sure that prior year adjustments have been made before you close out 2022.

 
Business tax estimates

Pay these before their deadlines to mitigate estimated tax penalties and increase state tax deductions.

State PTE Tax

Consider paying estimated tax payments at a corporate level to increase the state tax deduction.  Contact a K2N team member to estimate the savings.

Changes in recent years with 1099K, 1099-NEC, and 1099-MISC along with many misconceptions tend to lead to confusion most of which can easily be avoided.

In this issue, you will learn:

• 1099-Misc, 1099-NEC and 1099-K
• Common misunderstandings when issuing a 1099
• How to collecting the proper information to file 1099s
• Make things easire for the upcoming year
• Recommended methods of filing 1099s

1099-NEC vs 1099-MISC

The 1099-NEC was reintroduced in 2020 (originally in 1982).  It specifically decoupled "non-employee compensation" from the 1099-MISC.  So if you normally issued 1099-MISCs to subcontractors or unincorporated entities for services, you are now required to use 1099-NEC.

1099-MISC are still used for  Rents, Payments to an attorney, other income payments of at least $600.  For more information please see details here.

WHAT IS 1099-K?

If you accept credit cards, then likely you have received a 1099-K, which idicates gross revenues received by that merchant service.  Most busineses would not issue these.  New for 2022, Venmo, Zelle, Etsy and similar payment processing companies will issue 1099-Ks for payments received by businesses.

MOST COMMON MISUNDERSTANDINGS

Do I issue a 1099 to a vendor if I pay by credit or debit card?

No, these payments are reported to your recipient by the merchant service via form 1099-K 

I have subcontractors that are LLCs, do I have to file 1099s for them?

In most cases, LLCs are single member proprietors or partnerships and they would require a 1099 if they receive more than $600.  The  best way to find out if they are eligible is by requesting a Form W9 from the vendor.

Can I file a 1099 for a temporary employee?

No, employees are required to receive a W2.  You should check with your state and with the IRS and understand the differences between employees and subcontractors within your jurisdiction  We see many companies lose on audit with their state unemployment offices due to increasing rigid restrictions.

Do I have to issue a 1099 for work done on my home?

No, 1099s should be issued by business entities only.

Do I have to withhold taxes on 1099s?

Generally no, however if you are working with a foreign entity or person within the United States or if you have a vendor that refuses to complete Form W9, the IRS may require you to withhold and you should contact us as soon as possible.

I don't have subcontractors, so I don't have to file any 1099s, right?

This is a very common misunderstanding.  Any unincorporated vendor you pay for services (other than by credit card) may be eligible to receive a 1099.  For example, your accountant or bookkeeper is likely eligible to receive one if they are not incorporated.

Can I download and print 1099s and mail them to the IRS?

No, unfortunately downloaded 1099s, even with a color printer will not scan and the IRS can penalize you for not mailing them "official" forms which need to be ordered.  We strongly recommend you file online, electronically (see our recommended vendors below.)

COLLECTING THE RIGHT INFORMATION

Many companies use "doing business as," trade names, or LLCs.  Some have employment IDs which are not always the same as tax id's, which can create some confusion.  Also, many LLC's are actually filing as corporations, which you will not know unless you have a complete W9 returned to you by the client.

What is the best way to make sure we get the correct information?  When you receive a requested W9 from a back vendor, inspect it carefully.  It should have the full legal name and tax id.  If it does not, then you will need to reach out for corrections.  Single member LLCs, especially individuals must provide a first and last name and a social security number (not an employer id).  If you report incorrectly, the IRS may require backup withholdings for these individuals.

Should I request a W9 every year? Yes, things change and sometimes we don't always know when an address or ownership might have changed.  A "doing business as" vendor might now be owned by a different company or individual.  An LLC might now be filing as a corporation and not require a 1099.

Can I check a corporation status on my own?  Sometimes you can check the secretary of state's website to determine if your vendor is incorporated and in good standing.  It is still best to issue W9 requests.

MAKING THINGS EASIER GOING FORWARD

If you waited until Janary for the prior year's 1099s, in many cases it could be a lot more work under a tight deadline, especially if you are not current with bookeeping.  Here are some ideas to help you.

• Use the software tools built into your accounting system which generally can separate 1099 eligible vendors by account type and even exclude credit card payments made to these vendors.  Some softare providers even will file the 1099s for you, if your information is correct.
• Send an W9 annual update request to your vendors either using mail or email every November or December to ensure that any changes are appropriately captured for your 1099s.
• Develop a procurement process for onboarding new vendors prior to issuing payment.  You may want to consider other items for procurement, such as insurance binder information or updated contracts.  It is much easier to ask for information before issuing payments than after.

WHAT IS THE BEST WAY TO FILE?

As meninted above, using official IRS forms requires ordering and waiting for mail.  You can purchase these as well from an office supply store, but stocks are limited and it can get expensive if you make mistakes.

We strongly urge you use a service either from your accounting software provider or from a low cost bulk uploader like 1099online.com, tax1099.com, or efile4biz.com.

K2N can assist you in the filing process if needed, however we do have requirements in the way we receive this information to faciliate accurate reporting.  If you are interested, we do recommend you request a quote and must fully complete and securely upload an excel template with accurate information.

Some examples of fringe benefits are:

• Company paid group health and dental premiums for certain self-employed individuals
• Certain non-qualified and non-cafeteria plan expenses
• Company paid disability insurance premiums
• Daycare expenses directly or indirectly provided by an employer
• Personal use of a company car

We'll help you navigate reporting requirements and methods for some of the more common fringe benefit most businesses face.

Some of the common methods used to report fringe benefit compensastion include:

• Form W2 for employees
• Form W2 for 2% or greater shareholders (and certain relatives)
• Form K1 for partners
• Form 1099 for contractors
• Loss of Deduction

The +K2N Approach allows for planning and projecting for taxes and cash flow in order to understand opportunities for growth, value, and transition.

This philosophy reflects our core values strengthening our relationships with clients, employees and the community.

• Accountability
• Consistency with Innovation
• Proactive Planning Approach
• Team Based Support
• Value Creation

These strategies are the most common, albeit misunderstood expansion tactics in the contemporary business landscape. While both terms refer to the coming together of two businesses, there are some significant differences in how this happens. Companies creating a growth strategy should distinguish between these two corporate restructuring strategies.

Mergers

A merger is a combination of two separate businesses into a single new legal entity. The new entity has a new management structure, ownership, and a unique name that capitalizes on its competitive advantage and synergies. A merger occurs either by way of amalgamation or absorption.

Acquisitions

An acquisition, on the other hand, is a corporate restructuring strategy where a financially stronger entity takes over a less financially capable business to form a larger organization. It happens when one business acquires over 50% of shares to take over another company. In this case, there’s no formation of a new business, but rather the smaller entity ceases to exist. The acquiring company is larger in size, structure, and operations.

Mergers vs. Acquisitions

• In a merger, two companies amalgamate to form a new company. In an acquisition, one larger company buys out a smaller one to increase its size.
• In a merger, two entities dissolve to form one new larger entity. In an acquisition, there’s no formation of a new business.
• A merger, in most cases, is a friendlier and planned corporate restructuring strategy. An acquisition can be hostile or involuntary.
• A merger happens between two businesses of the same size or nature. These businesses seek to amalgamate their strengths and weaknesses to perform better. In an acquisition, a more substantial business overpowers a smaller one and takes it over.
• A merger entails more complicated legal formalities compared to an acquisition.
• A new name is required when businesses merge, but this is not necessary for acquisition. – In a merger, the power difference is almost negligent as compared to an acquisition where the acquiring company holds power and dictates the terms.
• New stocks are issued in a merger, but this doesn’t happen in an acquisition. If you need business advisory for your company in Windham, NH, or surrounding areas, talk to us today.

+K2N is a one-stop-shop for all your personal and business financial solutions. We are dedicated to providing value for our clients through forward-thinking and innovative solutions. Contact us today for your personalized financial advisory.

How Do I Start Planning for My Estate?

Before you can start deciding what to do with your estate, you need to think about what assets you might have and how you might use them. Assets include any property you own: cars, bank accounts, and any rights or licenses you have. But, estate planning is more than just the distribution of assets. It encompasses establishing guardianship for minor children and providing instructions for care if you are to become disabled. Once you have a record of all your assets, then you must determine how best to secure and allocate them.

How Do You Create a Will?

Estate plans are more than just wills. They encompass a Last Will and Testament, a Living Will, Healthcare Power of Attorney, Financial Power of Attorney, and a Living Trust. A last will and testament allows you to allocate your assets, assign a guardian for your children, and appoint an executor to carry out your wishes. It can be modified throughout your life. However, it does not help you avoid probate court and it cannot be kept private. Similarly, a trust allows you to set aside your assets but allows you to avoid probate court. A trust is best for assets you want passed along privately and quickly. A living will dictates how you will be cared for if you’re incapacitated and cannot make decisions for yourself. You can also assign a person to make these decisions for you by determining a healthcare power of attorney. If you are incapacitated, you can assign someone to make financial decisions for you.

Who Can +K2N Help You Plan Your Estate?

Now that you know a bit about estate planning, you might be tempted to start this process on your own. While you may be able to get some of this done yourself, it is best to rely on a professional to ensure your documents are prepared correctly. The experienced CPAs at OSGroup can help you plan for your future with peace of mind. If you’re in the Windham area, call us at (603) 329-6408 today.

Separate Personal and Business Funds

Keeping business funds and personal funds separate can help an entrepreneur see any spending trends that may get lost in the shuffle—and it also helps come tax season. By tracking each account individually, business owners can gain a greater understanding of business income and costs. Every business requires a certain amount of base income to survive, and that number should become clear if the business properly tracks its spending and funds. It should also help clarify which incurred expenses are tax-deductible. An independent CPA service can help with planning and budgeting to help make it easier to execute.

Consider Tax Ramifications

Speaking of taxes, another important consideration is how much money to set aside to cover the tax bill when that time comes. Take into consideration the tax rates in the area and figure out whether or not the business must file quarterly taxes. Generally, a good rule of thumb is to set aside at least 35% of the business’ income each month. Doing so will help the business avoid IRS late fees and potential audits.

Cheaper Does Not Always Equal Lower Quality

When making purchases for the company, be selective and shop around. It only hurts the business if the market price is met every single time. When it comes to suppliers, see if buying in bulk will net a discount. Buy used when the reward outweighs the risk. Consider the vital elements of the business and spend there, not on smaller priorities. When hiring, consider whether full-time is truly needed or if a freelancer or contractor could suffice. Full-time employees accrue more than just the stated salary. Consider insurance, training, and payroll fees.

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