Conner Ash P.C. - Certified Public Accountants and Business Consultants

Sole proprietors and owners of pass-through entities, listen up! Last year’s tax legislation made permanent the Section 199A qualified business income (QBI) deduction. Generally, QBI is the net amount of qualified income, gain, deduction and loss from a U.S. business. In most circumstances, the deduction equals 20% of QBI (not to exceed 20% of taxable income). But if your taxable income exceeds certain limits, your QBI deduction may be reduced. Your deduction might also be reduced — or eliminated — if your taxable income exceeds the limits and your QBI is from certain types of professional practices or investment services. Talk to us for details and help maximizing your QBI deduction.

Payroll administration can be challenging for small business owners — and errors can be costly.

Common trouble spots include incorrect withholding, late tax deposits, and failure to include taxable bonuses, awards or fringe benefits in employees’ wages. Mistakes can happen even with payroll software or an outside payroll provider. Reducing your risk requires two things: formal review procedures to identify problems quickly and prompt action to correct them.

We can help you comply with your payroll tax obligations. Contact us if you discover a payroll error or have questions about the applicable rules.

Does your business need to report deferred taxes? These accounting rules generally apply to businesses subject to entity-level income taxes that prepare GAAP financial statements. Deferred taxes often arise when income is recognized differently for book and tax purposes. Under GAAP, deferred tax assets are recorded for expected future tax benefits from deductible temporary differences and from carryforwards related to capital losses, net operating losses or tax credits. Conversely, deferred tax liabilities reflect the expected future tax effects of taxable temporary differences. Contact us for help accounting for deferred taxes and interpreting their effects on your financial statements.

For employers, sponsoring a retirement plan can help attract and retain talent. But it also creates fiduciary responsibilities under the Employee Retirement Income Security Act (ERISA). If your organization has executives or other employees who’ve taken on job duties that qualify them as fiduciaries, be sure to manage the risk. For starters, provide appropriate training. In addition, document prudent processes for selecting and monitoring investments and service providers. Review whether your insurance adequately addresses fiduciary liability, too. Don’t rely entirely on ERISA fidelity bonds. Contact us for help evaluating your retirement plan’s financial and administrative considerations.

The IRS has launched a digitally authenticated Tax Compliance Report that taxpayers can access through their IRS Individual Online Accounts. A tax compliance report shows whether an individual has filed tax returns and paid taxes on time. The report helps protect privacy by not showing the individual’s income, dependents or filing status. You can securely download the report when applying for a job or government benefits or completing a loan or mortgage application that requires tax compliance information. Organizations that receive the report can use its built-in digital certificate to confirm authenticity. For additional information, contact us or visit https://bit.ly/4gOIpsr

Are long-term care (LTC) insurance premiums tax-deductible? It depends. Qualified LTC policies are considered health insurance under federal income tax rules. So if you buy a policy, your premiums are treated as medical expenses for itemized deduction purposes. But your total eligible medical expenses for the year must meet the 7.5% of adjusted gross income threshold before you can start deducting LTC premiums. And there are age limits on how much you can deduct — for example, $500 for individuals age 40 and under and $6,200 for those 70 and over. Other age groups’ 2026 maximums fall between these two. Contact us for more information.

To attract and retain skilled workers, your small business needs to offer more than competitive pay. Your benefits package matters, too.

Tax-free fringe benefits may be especially valuable to employees. Examples include many types of insurance (health, disability, long-term care and life), assistance plans (dependent care, adoption and educational) and transportation benefits, subject to certain limits. The One Big Beautiful Bill Act also changed some fringe-benefit tax rules for 2026 and beyond.

Open enrollment is right around the corner for many businesses. As you review your 2027 benefits package, contact us for help evaluating your current offerings and fine-tuning them as needed.

There are many reasons individuals may need to access their tax transcripts. They include the need to file a tax return or apply for a mortgage or loan. In a Tax Tip (2026-25), the IRS lists several types of tax transcripts available for free to taxpayers. A tax return transcript shows most line items from the taxpayer’s original Form 1040-series tax return, along with any forms and schedules. It’s available for the current and three prior tax years. A tax account transcript shows basic information such as filing status, taxable income and payment types. It’s generally available for the current and nine prior tax years. To learn about other available transcripts: https://bit.ly/4qGb7za

Offering severance can help employers manage difficult workforce transitions. But if you’re considering it for your organization, be sure to account for the total financial impact beyond the payment itself. Severance generally constitutes taxable wages subject to withholding and employment taxes. Meanwhile, accrued paid leave, continuation of benefits and professional fees may add to the total cost of an employee’s departure. Payment timing can also affect your cash flow. And because state laws govern how severance may affect unemployment benefits, don’t assume it will prevent a claim. Contact us to evaluate all the tax and financial implications.