Succession Planning for Your Family Business

Succession Planning for Your Family Business

This article discusses the importance of having a succession plan. According to the Dayton Daily News, about 3 out of 4 small businesses currently do not have a succession plan. Succession plans should not be a birthright, but instead, should go to the most qualified individual. Planning for successor years ahead can eliminate power struggles, allows you to thoroughly vet candidates, and allows you to come to the realization that soon you will no longer be in charge. The best way to keep your business operating is by not failing to plan. To learn more about succession planning, click the link below!

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Affordable Marketing Ideas for Startups

Affordable Marketing Ideas for Startups

This article discusses how marketing is essential for any successful business, especially startups. However, sometimes the best marketing practices can be extremely expensive with little return on investment. However, using simple tips such as getting a social cost, having a referral program, and sending emails to the right people are all inexpensive ways that your startup can gain consumer attention. It's also important to constantly be in a creative and innovative mindset during this process. These tips paired with consistency can help your startup gain the attention that is desired. Be sure to check out this link for the full list and more details!

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Things to Consider Before Selling Your Business

Things to Consider Before Selling Your Business

This article discusses the best methods to practice before selling your business to someone who values it as much as you do. Firstly, it is important to determine your business value. In order to successfully do that it is necessary to follow the asset method, market method, and income method. It is also important to acquire a third-party professional to determine if the sale is fair. Seeking financial and legal expertise, hiring a professional business broker, setting a realistic asking price, keeping your paperwork in order, and keeping quiet until the sale is complete are very crucial steps in selling a business. To find out more tips on selling your business, click the link above!

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Tax Breaks for Helping Relatives

Tax Breaks for Helping Relatives

It’s not uncommon for adult children or siblings to act as caregivers for family members or give them financial assistance for medical or long-term care needs. The problem is that all too often those providing the help don’t take advantage of the tax benefits.

Types of Care

Caregiving happens through many different avenues. For example, family members might pay for services that their elderly parents need, such as housekeeping, meal preparation, or nursing care. Outside the home, they may pay for all or a portion of the cost of an assisted living facility.

In other circumstances, individuals could directly provide the care instead of paying for it. This could happen in either the home of the person giving the care or in the home of the person receiving the care. They might also support the relative’s daily living expenses by paying for groceries, utilities, or other essentials.

Assessing the Tax Breaks Available

Step one is to figure out if the person receiving care qualifies as a dependent on the caregiver’s tax return. While there are no longer personal or dependent exemptions, qualifying as a dependent opens the door to deduct medical expenses and other medical-related tax breaks. Let’s look at an example to understand the details better.

Dependent Test

Under our scenario, we have Rob taking care of his mother, Laura. Rob is allowed to claim Laura as a dependent if a set of tests are met. First, Laura’s gross income must be less than $4,300 in 2021. While this might seem low, note that tax-exempt interest and Social Security benefits are usually not included.

Second, Rob needs to provide the majority of Laura’s support in the calendar year. “Support” includes basic necessities such as clothes, a place to live, medical expenses, and transportation. In cases where the cared-for relative lives with the taxpayer, they are able to use the equivalent rental value of the housing provided. Given the broad definition of support, it’s often not too hard to meet this test – but make sure to keep diligent records, tracking the amount spent versus the dependent’s total support costs. You can always plan some extra payments near year-end to bump yourself over the 50 percent threshold.

Third, Laura needs to be a United States citizen.

Fourth, the location of the dependent matters. In the case of relatives such as parents, stepparents, grandparents, great-grandparents, and aunts and uncles, these persons can be considered a dependent even if they do not live with you. This means you can be helping them to live in their own house or care facility.

Fifth, Laura cannot jointly file a return with any other taxpayer.

Brothers and Sisters

What happens if you and some of your siblings split the support of a parent? It’s easy to see how in this case no one will meet the majority support test.

In the case of multiple support providers, someone can still claim the person as a dependent as long as all the supporting siblings agree on who makes the claim, and they file an IRS Form 2120, Multiple Support Declaration noting it.

Each Form 2120 signer must contribute at least 10 percent support for the year. The siblings can rotate who claims the deduction or keep it the same each year.

Why Dependency Matters

Given that the personal and dependent exemptions have been eliminated, you might wonder what all the fuss is about the person being cared for qualifying as a dependent. Well, the answer is the taxpayer who can claim the dependent is the one who can itemize the dependent's medical expenses as well.

Medical Expense Tax Benefit

The potential benefit comes when Rob is able to add his mother's medical expenses to those of the rest of his family. This can allow him to take a larger medical expense deduction when he itemizes expenses on his tax return. Remember that in order to benefit from any itemized deductions, the total of all itemized deductions must exceed the standard deduction.

Indirect medical costs also can be deducted, but only if the person cared for qualifies as a dependent. Mileage costs for providing transportation to medical appointments and treatments are deductible. In 2021, this expense is deductible at $0.16 per mile.

How and Why to Develop a Bring-Your-Own-Device Policy

How and Why to Develop a Bring-Your-Own-Device Policy

With the internet available for essentially all employees and remote work becoming a part of more businesses’ operations, developing a bring-your-own-device (BYOD) policy is almost necessary to help employees be more productive and safe while working. Research shows there are many reasons why businesses should develop the right type of BYOD policy.

According to Intel and Dell, 61 percent of Gen Y and 50 percent of workers 30 and older think the electronic devices they use at home are more capable of completing tasks in their everyday life compared to their work devices.

Frost & Sullivan found that connected handheld technology helps employees, making them about one-third more productive and reducing their average workday by 58 minutes.

A BYOD policy simply means that companies permit their workers to use their own smart devices to perform job-related tasks. It can be beneficial for a company, especially a smaller one; but it's important to evaluate the advantages and disadvantages before implementing one.

Advantages

One of the most obvious reasons for a business to develop and implement a BYOD policy is due to the proliferation of technology. Along with saving employers money by not having to provide a work device, there is no need to provide costly training on how to use the device. A 2016 Pew Research survey determined that 77 percent of U.S. adults have a smartphone. For those ages 18 to 29, more than 9 in 10 (92 percent) own a smartphone. In 2021, even more adults likely have at least one smartphone.

Potential Drawbacks/Legal Considerations

According to a 2017 Pew Research Center report, there's a significant portion of smartphone users with less-than-ideal security habits. For example, 28 percent of respondents don't secure their phone with a screen lock or similar features. Forty percent said they update their apps or phone's operating system only when it's convenient for them. Less common, but equally alarming: Between 10 percent and 14 percent of respondents never update their phone's operating system or apps.

Without a proper system set up, there are more security risks, including reduced or compromised company privacy and a lack of basic digital literacy among employees. Mobile Device Management software can help monitor, secure, and partition personal and business files in a dedicated area, providing more confidence when permitting employees to BYOD.

Other considerations for a BYOD policy might include prohibiting employees from downloading unauthorized apps; performing local back-ups of company data; disallowing syncing to other personal devices; not allowing modifications to hardware/software beyond routine installations; not using unsecured internet networks.

Depending on how employees are classified by the Fair Labor Standards Act (FLSA) for overtime compensation, businesses may be liable for overtime wages if non-exempt employees perform their duties outside the office. If non-exempt employees perform duties beyond “40 hours of work in a workweek,‚Äù as the U.S. Department of Labor outlines, businesses could be liable for additional wages paid if they use their device for work-related tasks.

While each company has its own needs and unique workforce, crafting a BYOD policy that increases productivity while maintaining security and privacy can give businesses a competitive edge.

Sources

https://i.dell.com/sites/content/business/solutions/whitepapers/it/Documents/intel-imr-consumerization-wp_it.pdf

https://insights.samsung.com/2016/08/03/employees-say-smartphones-boost-productivity-by-34-percent-frost-sullivan-research/

https://www.pewresearch.org/fact-tank/2017/01/12/evolution-of-technology/

https://www.pewresearch.org/fact-tank/2017/03/15/many-smartphone-owners-dont-take-steps-to-secure-their-devices/

https://www.dol.gov/agencies/whd/flsa