Business Taxes Archives - Page 4 of 27

Weighing the pluses and minuses of HDHPs + HSAs for businesses

Will your company be ready to add a health insurance plan for next year, or change its current one? If so, now might be a good time to consider your options. These things take time.

A popular benefits model for many small to midsize businesses is sponsoring a high-deductible health plan (HDHP) accompanied by employee Health Savings Accounts (HSAs). Like any such strategy, however, this one has its pluses and minuses.

Ground rules

HSAs are participant-owned, tax-advantaged accounts that accumulate funds for eligible medical expenses. To own an HSA, participants must be enrolled in an HDHP, have no other health insurance and not qualify for Medicare.

In 2025, an HDHP is defined as a plan with at least a $1,650 deductible for self-only coverage or $3,300 for family coverage. Also in 2025, participants can contribute pretax income of up to $4,300 for self-only coverage or $8,550 for family coverage. (These amounts are inflation-adjusted annually, so they’ll likely change for 2026.) Those age 55 or older can make additional catch-up contributions of $1,000.

Companies may choose to make tax-deductible contributions to employees’ HSAs. However, the aforementioned limits still apply to combined participant and employer contributions.

Participants can make tax-free HSA withdrawals to cover qualified out-of-pocket medical expenses, such as physician and dentist visits. They may also use their account funds for copays and deductibles, though not to pay many types of insurance premiums.

Pluses to ponder

For businesses, the “HDHP + HSAs” model offers several pluses. First, HDHPs generally have lower premiums than other health insurance plans — making them more cost-effective. Plus, as mentioned, your contributions to participants’ HSAs are tax deductible if you choose to make them. And, overall, sponsoring health insurance can strengthen your fringe benefits package.

HSAs also have pluses for participants that can help you “sell” the model when rolling it out. These include:

Participants can lower their taxable income by making pretax contributions through payroll deductions,
HSAs can include an investment component that may include mutual funds, stocks and bonds,
Account earnings accumulate tax-free,
Withdrawals for qualified medical expenses aren’t subject to tax, and the list of eligible expenses is extensive,
HSA funds roll over from year to year (unlike Flexible Spending Account funds), and
HSAs are portable; participants maintain ownership and control of their accounts if they change jobs or even during retirement.

In fact, HSAs are sometimes referred to as “medical IRAs” because these potentially valuable accounts are helpful for retirement planning and have estate planning implications as well.

Minuses to mind

The HDHP + HSAs model has its minuses, too. Some employees may strongly object to the “high deductible” aspect of HDHPs.

Also, if not trained thoroughly, participants can misuse their accounts. Funds used for nonqualified expenses are subject to income taxes. Moreover, the IRS will add a 20% penalty if an account holder is younger than 65. After age 65, participants can withdraw funds for any reason without penalty, though withdrawals for nonqualified expenses will be taxed as ordinary income.

Expenses are another potential concern. HSA providers (typically banks and investment firms) may charge monthly maintenance fees, transaction fees and investment fees (for accounts with an investment component). Many companies cover these fees under their benefits package to enhance the appeal of HSAs to employees.

Finally, HSAs can have unexpected tax consequences for account beneficiaries. Generally, if a participant dies, account funds pass tax-free to a spouse beneficiary. However, for other types of beneficiaries, account funds will be considered income and immediately subject to taxation.

Powerful savings vehicle

The HDHP + HSAs model helps businesses manage insurance costs, shifts more of medical expense management to participants, and creates a powerful savings vehicle that may attract job candidates and retain employees. But that doesn’t mean it’s right for every company. Please contact us for help assessing its feasibility, as well as identifying the cost and tax impact.

by Zak Barbagallo

6 essential tips for small business payroll tax compliance

Staying compliant with payroll tax laws is crucial for small businesses. Mistakes can lead to fines, strained employee relationships and even legal consequences. Below are six quick tips to help you stay on track.

1. Maintain organized records

Accurate recordkeeping is the backbone of payroll tax compliance. Track the hours worked, wages paid and all taxes withheld. Organizing your documentation makes it easier to verify that you’re withholding and remitting the correct amounts. If you ever face an IRS or state tax inquiry, having clear, detailed records will save time and reduce stress.

2. Understand federal withholding

Federal income tax. Employees complete Form W-4 so you can determine how much federal income tax to withhold. The amounts can be calculated using IRS tax tables.
FICA taxes (Social Security and Medicare). Your business is responsible for withholding a set percentage from each employee’s wages for Social Security and Medicare, and you must match that amount as an employer. The current tax rate for Social Security is 6.2% for the employer and 6.2% for the employee (12.4% total). Taxpayers only pay Social Security tax up to a wage base limit. For 2025, the wage base limit is $176,100. The current rate for Medicare tax is 1.45% for the employer and 1.45% for the employee (2.9% total). There’s no wage base limit for Medicare tax. All wages are subject to it.

3. Don’t overlook employer contributions

Depending on your state and industry, you may need to contribute additional taxes beyond those withheld from employee paychecks.

Federal Unemployment Tax Act (FUTA) tax. Employers pay FUTA tax to fund unemployment benefits.
State unemployment insurance. Requirements vary by state, so consult your state’s labor department for details. You can also find more resources at the U.S. Department of Labor.

4. Adhere to filing and deposit deadlines

Deposit schedules. Your deposit frequency for federal taxes (monthly or semi-weekly) depends on the total amount of taxes withheld. Missing a deadline can lead to penalties and interest charges.
Quarterly and annual filings. You must submit forms like the 941 (filed quarterly) and the 940 (filed annually for FUTA tax) on time, with any tax due.

Under the Trust Fund Recovery Penalty, a “responsible person” who willfully fails to withhold or deposit employment taxes can be held personally liable for a steep penalty. The penalty is equal to the full amount of the unpaid trust fund tax, plus interest. For this purpose, a responsible person can be an owner, officer, partner or employee with authority over the funds of the business.

5. Stay current with regulatory changes

Tax laws are never static. The IRS and state agencies update requirements frequently, and new legislation can introduce additional obligations. A proactive approach helps you adjust payroll systems or processes in anticipation of changes, rather than scrambling at the last minute.

6. Seek professional advice

No matter how meticulous your business is, payroll taxes can be complex. We can provide guidance specific to your industry and location. We can help you select the right payroll system, calculate employee tax withholding, navigate multi-state filing requirements and more. In short, we can help ensure that every aspect of your payroll is set up correctly.

by Zak Barbagallo

Business owners should get comfortable with their financial statements

Financial statements can fascinate accountants, investors and lenders. However, for business owners, they may not be real page-turners.

The truth is each of the three parts of your financial statements is a valuable tool that can guide you toward reasonable, beneficial business decisions. For this reason, it’s important to get comfortable with their respective purposes.

The balance sheet

The primary purpose of the balance sheet is to tally your assets, liabilities and net worth, thereby creating a snapshot of your business’s financial health during the statement period.

Net worth (or owners’ equity) is particularly critical. It’s defined as the extent to which assets exceed liabilities. Because the balance sheet must balance, assets need to equal liabilities plus net worth. If the value of your company’s liabilities exceeds the value of its assets, net worth will be negative.

In terms of operations, just a couple of balance sheet ratios worth monitoring, among many, are:

Growth in accounts receivable compared with growth in sales. If outstanding receivables grow faster than the rate at which sales increase, customers may be taking longer to pay. They may be facing financial trouble or growing dissatisfied with your products or services.

Inventory growth vs. sales growth. If your business maintains inventory, watch it closely. When inventory levels increase faster than sales, the company produces or stocks products faster than they’re being sold. This can tie up cash. Moreover, the longer inventory remains unsold, the greater the likelihood it will become obsolete.

Growing companies often must invest in inventory and allow for increases in accounts receivable, so upswings in these areas don’t always signal problems. However, jumps in inventory or receivables should typically correlate with rising sales.

Income statement

The purpose of the income statement is to assess profitability, revenue generation and operational efficiency. It shows sales, expenses, and the income or profits earned after expenses during the statement period.

One term that’s commonly associated with the income statement is “gross profit,” or the income earned after subtracting cost of goods sold (COGS) from revenue. COGS includes the cost of labor and materials required to make a product or provide a service. Another important term is “net income,” which is the income remaining after all expenses — including taxes — have been paid.

The income statement can also reveal potential problems. It may show a decline in gross profits, which, among other things, could mean production expenses are rising more quickly than sales. It may also indicate excessive interest expenses, which could mean the business is carrying too much debt.

Statement of cash flows

The purpose of the statement of cash flows is to track all the sources (inflows) and recipients (outflows) of your company’s cash. For example, along with inflows from selling its products or services, your business may have inflows from borrowing money or selling stock. Meanwhile, it undoubtedly has outflows from paying expenses, and perhaps from repaying debt or investing in capital equipment.

Although the statement of cash flows may seem similar to the income statement, its focus is solely on cash. For instance, a product sale might appear on the income statement even though the customer won’t pay for it for another month. But the money from the sale won’t appear as a cash inflow until it’s collected.

By analyzing your statement of cash flows, you can assess your company’s ability to meet its short-term obligations and manage its liquidity. Perhaps most importantly, you can differentiate profit from cash flow. A business can be profitable on paper but still encounter cash flow issues that leave it unable to pay its bills or even continue operating.

Critical insights

You can probably find more exciting things to read than your financial statements. However, you won’t likely find anything more insightful regarding how your company is performing financially. We can help you not only generate best-in-class financial statements, but also glean the most valuable information from them.

by Zak Barbagallo

4 ways business owners can make “the leadership connection”

To get the most from any team, its leader must establish a productive rapport with each member. Of course, that’s easier said than done if you own a company with scores or hundreds of workers. Still, it’s critical for business owners to make “the leadership connection” with their employees.

Simply put, the leadership connection is an authentic bond between you and your staff. When it exists, employees feel like they genuinely know you — if not literally, then at least in the sense of having a positive impression of your personality, values and vision. Here are four ways to build and strengthen the leadership connection with your workforce.

1. Listen and share

Today’s employees want more than just equitable compensation and benefits. They want a voice. To that end, set up an old-fashioned suggestion box or perhaps a more contemporary email address or website portal for staff to share concerns and ask questions.

You can directly reply to queries with broad implications. Meanwhile, other executives or managers can handle questions specific to a given department or position. Choose communication channels thoughtfully. For example, you might share answers through company-wide emails or make them a feature of an internal newsletter or blog. Video messages can also be effective.

2. Stage formal get-togethers

Although leaders at every level need to be careful about calling too many meetings, there’s still value in getting everyone together in one place in real time. At least once a year, consider holding a “town hall” meeting where:

The entire company gathers to hear you (and perhaps others) present on the state of the business, and
Anyone can ask a question and have it answered (or receive a promise for an answer soon).

Town hall meetings are a good venue for discussing the company’s financial performance and establishing expectations for the immediate future.

You could even take it to the next level by organizing a company retreat. One of these events may not be feasible for businesses with bigger workforces. However, many small businesses organize off-site retreats so everyone can get better acquainted and explore strategic ideas.

3. Make appearances

Meetings are useful, but they shouldn’t be the only time staff see you. Interact with them in other ways as well. Make regular visits to each unit, department or facility of your business. Give managers a chance to speak with you candidly. Sit in on meetings; ask and answer questions.

By doing so, you may gather ideas for eliminating costly redundancies and inefficiencies. Maybe you’ll even find inspiration for your next big strategic move. Best of all, employees will likely get a morale boost from seeing you take an active interest in their corners of the company.

4. Have fun and celebrate

All work and no play makes business owners look dull and distant. Remember, employees want to get to know you as a person, at least a little bit. Show positivity and a sense of humor. Share appropriate personal interests, such as sports or caring for pets, in measured amounts.

Above all, don’t neglect to celebrate your business’s successes. Be enthusiastic about hitting sales numbers or achieving growth targets. Recognize the achievements of others — not just on the executive team but throughout the company. Give shout-outs to staff members on their birthdays and work anniversaries.

It’s all about trust

At the end of the day, the leadership connection is all about building trust. The greater your employees’ trust in you, the more loyal, engaged and productive they’ll likely be. We can help you measure your business’s productivity and evaluate workforce development costs.

by Zak Barbagallo

Hiring independent contractors? Make sure you’re doing it right

Many businesses turn to independent contractors to help manage costs, especially during times of staffing shortages and inflation. If you’re among them, ensuring these workers are properly classified for federal tax purposes is crucial. Misclassifying employees as independent contractors can result in expensive consequences if the IRS steps in and reclassifies them. It could lead to audits, back taxes, penalties and even lawsuits.

Understanding worker classification

Tax law requirements for businesses differ for employees and independent contractors. And determining whether a worker is an employee or an independent contractor for federal income and employment tax purposes isn’t always straightforward. If a worker is classified as an employee, your business must:

Withhold federal income and payroll taxes,
Pay the employer’s share of FICA taxes,
Pay federal unemployment (FUTA) tax,
Potentially offer fringe benefits available to other employees, and
Comply with additional state tax requirements.

In contrast, if a worker qualifies as an independent contractor, these obligations generally don’t apply. Instead, the business simply issues Form 1099-NEC at year end (for payments of $600 or more). Independent contractors are more likely to have more than one client, use their own tools, invoice customers and receive payment under contract terms, and have an opportunity to earn profits or suffer losses on jobs.

Defining an employee

What defines an “employee”? Unfortunately, there’s no single standard.

Generally, the IRS and courts look at the degree of control an organization has over a worker. If the business has the right to direct and control how the work is done, the individual is more likely to be an employee. Employees generally have tools and equipment provided to them and don’t incur unreimbursed business expenses.

Some businesses that misclassify workers may qualify for relief under Section 530 of the tax code, but only if specific conditions are met. The requirements include treating all similar workers consistently and filing all related tax documents accordingly. Keep in mind, this relief doesn’t apply to all types of workers.

Why you should proceed cautiously with Form SS-8

Businesses can file Form SS-8 to request an IRS determination on a worker’s status. However, this move can backfire. The IRS often leans toward classifying workers as employees, and submitting this form may draw attention to broader classification issues — potentially triggering an employment tax audit.

In many cases, it’s wiser to consult with us to help ensure your contractor relationships are properly structured from the outset, minimizing risk and ensuring compliance. For example, you can use written contracts that clearly define the nature of the relationships. You can maintain documentation that supports the classifications, apply consistent treatment to similar workers and take other steps.

When a worker files Form SS-8

Workers themselves can also submit Form SS-8 if they believe they’re misclassified — often in pursuit of employee benefits or to reduce self-employment tax. If this happens, the IRS will contact the business, provide a blank Form SS-8 and request it be completed. The IRS will then evaluate the situation and issue a classification decision.

Help avoid costly mistakes

Worker classification is a nuanced area of tax law. If you have questions or need guidance, reach out to us. We can help you accurately classify your workforce to avoid costly missteps.

by Zak Barbagallo

Companies should take a holistic approach to cybersecurity

Today’s businesses have two broad choices regarding cybersecurity: wait for something bad to happen and react to it, or proactively address the threat. Not surprisingly, we recommend the latter approach.

The grim truth is cyberattacks are no longer only an information technology (IT) issue. They pose a serious risk to every level and function of a business. That’s why your company should take a holistic approach to cybersecurity. Let’s look at a few ways to put this into practice.

Start with leadership

Fighting the many cyberthreats currently out there calls for leadership. However, it’s critical not to place sole responsibility for cybersecurity on one person, if possible. If your company has grown to include a wider executive team, delegate responsibilities pertinent to each person’s position. For example, a midsize or larger business might do something like this:

The CEO approves and leads the business’s overall cybersecurity strategy,
The CFO oversees cybersecurity spending and helps identify key financial data,
The COO handles how to integrate cybersecurity measures into daily operations,
The CTO manages IT infrastructure to maintain and strengthen cybersecurity, and
The CIO supervises the management of data access and storage.

To be clear, this is just one example. The specifics of delegation will depend on factors such as the size, structure and strengths of your leadership team. Small business owners can turn to professional advisors for help.

Classify data assets

Another critical aspect of cybersecurity is properly identifying and classifying data assets. Typically, the more difficult data is to find and label, the greater the risk that it will be accidentally shared or discovered by a particularly invasive hacker.

For instance, assets such as Social Security, bank account and credit card numbers are pretty obvious to spot and hide behind firewalls. However, strategic financial projections and many other types of intellectual property may not be clearly labeled and, thus, left insufficiently protected.

The most straightforward way to identify all such assets is to conduct a data audit. This is a systematic evaluation of your business’s sources, flow, quality and management practices related to its data. Bigger companies may be able to perform one internally, but many small to midsize businesses turn to consultants.

Regularly performed company-wide data audits keep you current on what you must protect. And from there, you can prudently invest in the right cybersecurity solutions.

Report, train and test

Because cyberattacks can occur by tricking any employee, whether entry-level or C-suite, it’s critical to:

Ensure all incidents are reported. Set up at least one mechanism for employees to report suspected cybersecurity incidents. Many businesses simply have a dedicated email for this purpose. You could also implement a phone hotline or an online portal.

Train, retrain and upskill continuously. It’s a simple fact: The better trained the workforce, the harder it is for cybercriminals to victimize the company. This starts with thoroughly training new hires on your cybersecurity policies and procedures.

But don’t stop there — retrain employees regularly to keep them sharp and vigilant. As much as possible, upskill your staff as well. This means helping them acquire new skills and knowledge in addition to what they already have.

Test staff regularly. You may think you’ve adequately trained your employees, but you’ll never really know unless you test them. Among the most common ways to do so is to intentionally send them a phony email to see how many of them identify it as a phishing attempt.

Of course, phishing isn’t the only type of cyberattack out there. So, develop other testing methods appropriate to your company’s operations and data assets. These could include pop quizzes, role-playing exercises and incident-response drills.

Spend wisely

Unfortunately, just about every business must now allocate a percentage of its operating budget to cybersecurity. To get an optimal return on that investment, be sure you’re protecting all of your company, not just certain parts of it. Let us help you identify, organize and analyze all your technology costs.

by Zak Barbagallo

How your business can sharpen its marketing strategy

Creating a marketing strategy for any company isn’t a “one and done” activity. As you’ve no doubt experienced, the approach you use to connect with your audience needs to adapt to factors such as the economy, marketplace changes, and customer and prospect preferences. Let’s take a step back and review some of the big-picture tasks associated with sharpening your marketing strategy.

Refine target selection

Consider each prospect, existing customer and target group as an investment. Estimate your net profit after subtracting production, sales and customer service costs.

More desirable customers will buy in sizable volumes with enough frequency to provide a steady income stream over time rather than serve as one-time or infrequent buyers. They’ll also be potential targets for cross-selling other products or services to generate incremental revenue.

Bear in mind that you must have the operational capacity to fulfill a prospect’s demand. If not, you’ll need to expand your operations to take on that customer, which will cost you more in resources and capital.

Also, be wary of becoming too dependent on a few large customers. They can use this status as leverage to lowball you. Or, if they decide to pull the plug, it could be financially devastating.

Adjust price points

Your price points are another key factor. It’s a tricky balance: Setting prices low may help attract customers, but it can also minimize or even eliminate your profit margin.

In addition, think about what payment terms you’re prepared to offer. Sluggish accounts receivable can strain cash flow. Establishing a timely payment schedule with customers is critical to sustaining operations and supporting the bottom line.

If you must spend a substantial amount of cash to set up a new customer, such as buying new equipment, consider offering initial pricing that includes a surcharge for a specified period. After you’ve recovered the cost of the equipment plus carrying charges, you might offer the customer a volume- or loyalty-based discount.

Craft your messaging

When you know who you want to sell to and what you’re going to charge, it’s time to craft your messaging. This is obviously the key step — literally marketing your products or services. So, clarity and consistency are key.

Begin by identifying your core value proposition. This is what sets your business apart from competitors. Communicate it in simple, direct language. Generally, you want to avoid jargon unless you’re working in a very specific context where industry terminology or technical knowledge is critical to sales. Be persuasive by providing remedies for your audience’s pain points.

You may need to tailor messaging to different market segments. For example, established customers usually respond best to a marketing message that reminds them of your company’s reliability and the total value of your mutually beneficial relationship. Meanwhile, prospects and newer customers probably need more persuasion and “proof of value.” Carefully choose the right marketing channels as well. These may include print, email, social media and in-person outreach.

Finally, watch out for inconsistency. Even if you vary your exact wording when addressing different market segments, your overall messaging needs to be uniform in look, tone and details. Disjointed communication — especially when it comes to things like pricing and product or service specifications — can sink a marketing strategy fast.

Today and tomorrow

An ineffective approach to marketing can quietly sap a company’s financial strength as sales leads diminish in number or value and competitors gain more attention in the marketplace. Conversely, a strong and timely marketing strategy can be a real revenue driver. We can analyze your marketing costs, as well as your price points, and help you develop a viable strategy for today and tomorrow.

by Zak Barbagallo

The IRS recently announced 2026 amounts for Health Savings Accounts

The IRS recently released the 2026 inflation-adjusted amounts for Health Savings Accounts (HSAs). Employees will be able to save a modest amount more in their HSAs next year.

HSA basics

An HSA is a trust created or organized exclusively for the purpose of paying the “qualified medical expenses” of an “account beneficiary.” An HSA can only be established for the benefit of an “eligible individual” who is covered under a “high-deductible health plan” (HDHP). In addition, a participant can’t be enrolled in Medicare or have other health coverage (exceptions include dental, vision, long-term care, accident and specific disease insurance).

Within specified dollar limits, an above-the-line tax deduction is allowed for an individual’s contribution to an HSA. This annual contribution limitation and the annual deductible and out-of-pocket expenses under the tax code are adjusted annually for inflation.

Inflation adjustments for next year

In Revenue Procedure 2025-19, the IRS released the 2026 inflation-adjusted figures for contributions to HSAs. For calendar year 2026, the annual contribution limitation for an individual with self-only coverage under an HDHP will be $4,400. For an individual with family coverage, the amount will be $8,750. These are up from $4,300 and $8,550, respectively, in 2025.

There’s an additional $1,000 “catch-up” contribution amount for those age 55 or older in 2026 (and 2025).

An HDHP is generally a plan with an annual deductible that isn’t less than $1,700 for self-only coverage and $3,400 for family coverage in 2026 (up from $1,650 and $3,300, respectively, in 2025). In addition, in 2026, the sum of the annual deductible and other annual out-of-pocket expenses required to be paid under the plan for covered benefits (but not for premiums) can’t exceed $8,500 for self-only coverage and $17,000 for family coverage. In 2025, these amounts are $8,300 and $16,600, respectively.

Advantages of HSAs

There are a variety of benefits to HSAs. Contributions to the accounts are made on a pre-tax basis. The money can accumulate tax-free year after year and can be withdrawn tax-free to pay for a variety of medical expenses such as doctor visits, prescriptions, chiropractic care and premiums for long-term care insurance. In addition, an HSA is “portable” — it stays with an account holder if he or she changes employers or leaves the workforce. Contact us if you have questions about HSAs at your business.

by Zak Barbagallo

Mission and vision statements help businesses rise above the din

Many of today’s businesses operate in a cacophonous marketplace. Everyone is out blasting emails, pushing notifications and proclaiming their presence on social media. Where does it all leave your customers and prospects? Quite possibly searching for a clear perception of your company.

One way — well, two ways — to rise above the din is to craft a mission statement and a vision statement. Although they may seem like superfluous marketing exercises to some, these two statements can help clarify your identity to customers and prospects. They can also matter to lenders, investors, the news media and job candidates.

Why you’re here

Let’s start with the mission statement. Its purpose is to express to the world why you’re in business, what you’re offering and whom you’re looking to serve. For example, the U.S. Department of Labor has this as its mission statement:

To foster, promote, and develop the welfare of the wage earners, job seekers, and retirees of the United States; improve working conditions; advance opportunities for profitable employment; and assure work-related benefits and rights.

Forget flowery language and industry jargon. Write in clear, simple, honest terms. Keep the statement brief, a paragraph at most. Answer questions that any interested party would likely ask. Why did your company go into business? What makes your products or services worth buying? Who’s your target market?

You know the answers to these questions. But distilling them into a clear, concise mission statement can do more than raise your visibility in the marketplace. It may also help renew your commitment to your original or actual mission or reveal where you’ve gotten off track.

With a mission statement in place, you can engage in more focused strategic planning. Moreover, it helps boost employee engagement, serving as a driving philosophy for everyone. And as mentioned, the right mission statement really is a marketing asset: It tells the buying public precisely who you are.

Where you’re going

So, what does a vision statement do? It tells interested parties where you’re going; that is, what you want to accomplish.

A vision statement should be even briefer than your mission statement. Think of it as a tagline for a movie or even an advertising slogan. You want to deliver a memorable quote that will get readers’ attention and let them know you’re moving into a future where you’ll provide the highest quality products and services in your industry.

Whereas a mission statement is anchored in the present, a vision statement focuses on the horizon. For instance, the mission statement of the Alzheimer’s Association is:

The Alzheimer’s Association leads the way to end Alzheimer’s and all other dementia — by accelerating global research, driving risk reduction and early detection, and maximizing quality care and support.

But its vision statement is simply: “A world without Alzheimer’s and all other dementia.”

Create a vision statement that’s a rallying cry for your company. Don’t be afraid to be aspirational, bold and appeal to people’s emotions. Remember, this isn’t where you are, it’s where you intend to go.

How to proceed

Creating mission and vision statements can be a fun, creative way to unite a company. If you already have both, well done! But don’t forget that you can still revisit and refine the language. And if you ever decide to do a major marketplace pivot or even undergo a business transformation, you’ll likely want to rewrite your mission and vision statements entirely.

by Zak Barbagallo

Family business focus: Addressing estate and succession planning

The future often weighs heavier on the shoulders of family business owners. Their companies aren’t just “going concerns” with operating assets, human resources and financial statements. The business usually holds a strong sentimental value and represents years of hard work involving many family members.

If this is the case for your company, an important issue to address is how to integrate estate planning and succession planning. Whereas a nonfamily business can simply be sold to new ownership with its own management, you may want to keep the company in the family. And that creates some distinctive challenges.

Question of control

From an estate planning perspective, transferring ownership of assets to the younger generation as early as possible allows you to remove future appreciation from your estate, thereby minimizing estate taxes. Proactive planning may be especially relevant today, given the federal estate and gift tax regime under the Tax Cuts and Jobs Act.

For 2025, the unified federal estate and gift tax exemption is $13.99 million ($27.98 million for a married couple). Absent congressional action, this lifetime exemption is scheduled to drop by about half after this year. As of this writing, Congress is working on tax legislation that could potentially extend the current high exemption amount.

However, when it comes to transferring ownership of a family business, you may not be ready to hand over the reins — or you may feel that your children (or others) aren’t yet ready to take over. You may also have family members who aren’t involved in the company. Providing these heirs with equity interests that don’t confer control is feasible with proper planning.

Vehicles to consider

Various vehicles may allow you to transfer family business interests without immediately giving up control. For example, if your company is structured as a C or S corporation, you can issue nonvoting stock. Doing so allows current owners to retain control over business decisions while transferring economic benefits to other family members.

Alternatively, there are several trust types to consider. These include a revocable living trust, an irrevocable trust, a grantor retained annuity trust and a family trust. Each has its own technical requirements, so you must choose carefully.

Then again, you could form a family limited partnership. This is a legal structure under which family members pool their assets for business or investment purposes while retaining control of the company and benefiting from tax advantages.

Finally, many family businesses are drawn to employee stock ownership plans (ESOPs). Indeed, an ESOP may be an effective way to transfer stock to family members who work in the company and other employees, while allowing owners to cash out some of their equity in the business.

You and other owners can use this liquidity to fund your retirements, diversify your portfolios or provide for family members who aren’t involved in the business. If an ESOP is structured properly, you can maintain control over the business for an extended period — even if the ESOP acquires most of the company’s stock.

Not easy, but important

For family businesses, addressing estate and succession planning isn’t easy, but it’s important. One thing all the aforementioned vehicles have in common is that implementing any of them will call for professional guidance, including your attorney. Please keep us in mind as well. We can help you manage the tax and cash flow implications of planning a sound financial future for your company and family.

by Zak Barbagallo

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