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How to Automate Overdue Payment Reminders in QuickBooks® (and Why It Works)

Late invoices can throw a wrench into your cash flow—but if you’re not already automating reminder emails, you’re leaving money on the table. The good news? Modern invoicing systems make it easier than ever to stay on top of late payments while preserving client goodwill.

Why Automation Is a Must-Have in 2025

82–87% of businesses  report handling delayed payments, but savvy companies using automated, multi-stage reminder sequences typically see faster results and fewer client friction points.

The best workflows balance timing + tone, beginning gentle and escalating as needed.

Step-by-Step Setup with QuickBooks® Online (Example)

Looking for something hands-on? Here’s how to enable and customize automated payment reminders in QuickBooks® Online:

Navigate to Settings → Account and Settings → Sales.
In the Reminders section, click Edit, then toggle Automatic invoice reminders on.
Schedule your reminders (e.g., send one them up to 90 days before or after the due date).
Adjust subject lines, personal greetings, and message content for each reminder. Friendly yet clear tones work best.

Crafting the Perfect Reminder Sequence

Here’s a model you can easily adapt for your business, regardless of industry:

Stage	Timing	Tone & Content
Pre-due	3–5 days before due	Friendly heads-up, invoice attached
Due date	On due date	Gentle nudge, reminder of terms
Short overdue	3–7 days late	Polite follow-up, ask for payment date
Mid overdue	14–30 days late	Firm tone, mention late fees/options
Final notice	30+ days late	Urgent, escalate payment needs

Research supports this staged delivery strategy as a high performer for balancing results and relationships.

Take Automation Even Further

To stay efficient and personalized:

Leverage AI-powered tools for smart follows: extract data, predict late payments, and auto-trigger reminders based on customer behavior.

Treat it as a system, not just emails: Monitor who’s been reminded, follow up manually if needed, and keep records tidy.

Automating overdue payment reminders isn’t just about efficiency; it’s about consistency and relationships. QuickBooks Online®’s invoicing platform makes it straightforward to:

Set up sequenced reminders that feel human

Customize timing and tone for clarity and effectiveness

Add scalable, smart automation with AI

Contact our office if you need assistance taking full advantage of your QuickBooks® accounting software.

How the Adoption Credit Can Ease Your Path to Parenthood

Are you in the process of or thinking about adopting? The tax code includes an adoption credit which is a significant benefit available to taxpayers who adopt a child, providing financial relief for eligible expenses. For the 2025 tax year, there have been notable enhancements to the adoption credit.

Overview of the Adoption Credit: The adoption credit is designed to assist adoptive families by offsetting some of the costs associated with adoption. In 2025, the adoption credit is capped at $17,280 for qualified expenses per adoption (not per return). A pivotal update this year is that part of the credit, up to $5,000, is refundable. This new feature allows adoptive families to receive a cash refund if the credit exceeds their total tax liability.

Eligibility and Definitions

Eligible Child: For the purposes of the adoption credit, an eligible child is defined as any individual under the age of 18 or a person who is physically or mentally incapable of self-care.

Special Needs Child: A special needs child is typically difficult to place for adoption, often due to factors like age, racial or ethnic background, the presence of a medical condition or disability, or being part of a sibling group that should be adopted together. Often, state governments determine if a child is special needs, but starting after 2024, Indian tribal governments also have the authority to make such determinations, ensuring greater inclusivity.
Important note about the credit for a special needs child: Generally, the adoption credit can’t exceed the qualified adoption expenses paid by the taxpayer for an eligible child, but when a special needs child is adopted, the taxpayer is treated as having incurred expenses equal to the year’s maximum credit amount, even when the taxpayer’s actual expenses are less.

Qualified Adoption Expenses: These are reasonable and necessary expenses directly related to the legal adoption of an eligible child. Eligible expenses include adoption fees, court costs, attorney fees, and travel expenses. Not eligible are the expenses for carrying out a surrogate parent arrangement, adopting a child of the taxpayer’s spouse, and those paid for by any federal, state or local program.

Financial Considerations

Refundable vs. Non-Refundable Credit: The new refundable portion of the credit is an exciting update, enabling families to benefit even if their tax liability is lower than the credit. Meanwhile, the non-refundable portion can be carried forward for up to five years, providing additional opportunities for families to utilize the credit over time.

Higher Income Credit Phase-Outs: In 2025, the credit begins to phase out for taxpayers with a modified adjusted gross income (AGI) over $259,190, fully phasing out at an AGI of $299,190. This means families with incomes between these two amounts will see a reduced credit, and no credit at all if the top of the range is exceeded. The phaseout thresholds and caps are the same for all filing statuses, and are inflation-adjusted each year. Credits that are carried over are not subject to the phaseout rules in the carryover year.

Specific Circumstances and Rules

Failed Domestic Adoptions: If a domestic adoption attempt fails, adoptive parents may still qualify for the adoption credit for expenses incurred, provided these expenses are associated with the attempt to adopt an eligible child. This provision recognizes the significant costs and emotional investment involved in such situations.

Special Rules for Foreign Adoptions: When adopting a child from a foreign country, specific rules apply. The adoption must be finalized for the adoptive parents to claim the credit. Additionally, expenses can be claimed either in the tax year the adoption becomes final or in the year the expenses are paid, whichever comes later. An important aspect of foreign adoptions is obtaining an IR-Visa, which facilitates the entry of the adopted child into the U.S.

Readoption Expenses: Some families choose or are required to readopt a child in their home state after adopting abroad. These expenses are also considered qualified, providing further financial relief to adoptive families facing complex legal processes.

Employer Reimbursement and its Impact: If an employer reimburses an employee for adoption expenses, this benefits the employee but can affect the tax treatment of the adoption credit. Employer-reimbursed expenses must be subtracted from the total adoption expenses when calculating the eligible amount for the credit.

Adoption Process Essentials

Obtaining an Adoptive Child ID Number: Each adopted child must have a taxpayer identification number (TIN), such as a Social Security Number (SSN) or an Adoption Taxpayer Identification Number (ATIN) if an SSN isn’t immediately available. This is crucial for both claiming the adoption credit and for tax-related documentation.

Filing Requirements for Married Taxpayers: Married couples generally must file jointly to claim the adoption credit, ensuring that both spouses’ incomes and expenses are considered in determining eligibility and credit amounts. A notable exception exists if the taxpayers are considered unmarried by being legally separated or living apart for the last six months of the year.

Strategic Financial Planning: The adoption credit offers a valuable tool for financial planning in the adoption process. Families considering adoption should analyze how the credit fits into their broader financial picture, considering aspects like income levels, expected adoption-related expenses, and their potential tax liability.

Tax Benefits Beyond the Adoption Credit: Adoptive parents may be eligible for several tax benefits beyond the adoption credit. These benefits can help alleviate some of the financial burdens associated with adopting a child. Here are some notable tax benefits that may apply to adoptive parents:

Adoption Assistance Programs: Many employers offer adoption assistance programs as part of their employee benefits. Under these programs, employers may reimburse employees for qualified adoption expenses. Employees can exclude these reimbursements from their taxable income up to a certain limit $17,280 for 2025).
Child Tax Credit: Adopted children qualify as dependents on a parent’s tax return, and for a dependent child under age 17 the parents are allowed to claim a Child Tax Credit. This $2,200 credit provides additional financial relief and may significantly reduce tax liabilities.
Child and Dependent Care Credit: If you require childcare to work or look for work, you may qualify for a credit for a percentage of daycare expenses incurred, which can be beneficial as you transition your adopted child into your household. The credit applies only if the child is under age 13.
Earned Income Tax Credit (EITC): Adopted children can be qualifying children for the Earned Income Tax Credit, a benefit for low- to moderate-income earners. The EITC can significantly reduce tax owed and potentially result in a refund.
Medical Expense Deductions: Any unreimbursed medical expenses related to the adoption that exceed 7.5 % of a taxpayer’s adjusted gross income may be deductible. This includes costs related to the medical care of the adopted child and any health assessments required.
State Adoption Tax Credits: Some states offer additional adoption tax credits or deductions, which can vary significantly depending on state legislation.
Accessible Source of Funds: For many individuals, retirement accounts such as 401(k)s or IRAs constitute one of the larger pools of savings. This makes them an attractive option for funding large, upfront costs associated with adoption. The U.S. tax code accommodates adoptive parents by waiving the typical 10% early withdrawal penalty for up to $5,000 withdrawn from the plan during the 1-year period after the legal adoption is finalized.

Each of these benefits comes with specific eligibility criteria and limitations. Adoptive parents should review the IRS guidelines or consult with a tax professional to understand how to optimize these benefits in the context of their overall financial situation.

Conclusion: With the changes for the 2025 and future tax years, the adoption credit becomes even more beneficial, particularly with the introduction of a refundable portion. Understanding the nuances of eligibility requirements, phase-out thresholds, and specific rules regarding failed, domestic, and foreign adoptions is essential. By carefully planning and coordinating with this office, adoptive families can maximize the benefits of the adoption credit, alleviating some of the financial pressures of growing their families through adoption.

Occupations Qualified for Tip Deduction Released

On September 2, 2025, the Treasury Department released a draft list of 68 occupations eligible for the new “no tax on tips” deduction. This deduction is part of the “One Big Beautiful Bill Act,” signed into law on July 4, 2025, and applies to federal income taxes for the 2025—2028 tax years. 

The deduction is available for a maximum of $25,000 in qualifying tips per person, per year. It is structured as a “below-the-line” deduction, meaning it is available to taxpayers who take the standard deduction, but is not used to compute adjusted gross income (AGI).

Here is the Treasury’s draft list of occupations:

Beverage & Food Service: 

Bartenders

Wait staff

Food servers, non-restaurant

Dining room and cafeteria attendants and bartender helpers

Chefs and cooks

Food preparation workers

Fast Food and Counter Workers

Dishwashers

Host staff, restaurant, lounge, and coffee shop

Bakers

Entertainment and Events: 

Gambling dealers

Gambling change persons and booth cashiers

Gambling cage workers

Gambling and sports book writers and runners

Dancers

Musicians and singers

Disc jockeys (except radio)

Entertainers and performers

Digital content creators

Ushers, lobby attendants and ticket takers

Locker room, coatroom and dressing room attendants

Hospitality and Guest Services: 

Baggage porters and bellhops

Concierges

Hotel, motel and resort desk clerks

Maids and housekeeping cleaners

Home Services 

Home maintenance and repair workers

Home landscaping and groundskeeping workers

Home electricians

Home plumbers

Home heating/air conditioning mechanics and installers

Home appliance installers and repairers

Home cleaning service workers

Locksmiths

Roadside assistance workers

Personal Services 

Personal care and service workers

Private event planners

Private event and portrait photographers

Private event videographers

Event officiants

Pet caretakers

Tutors

Nannies and babysitters

Personal Appearance and Wellness 

Skincare specialists

Massage therapists

Barbers, hairdressers, hairstylists and cosmetologists

Shampooers

Manicurists and pedicurists

Eyebrow threading and waxing technicians

Makeup artists

Exercise trainers and group fitness instructors

Tattoo artists and piercers

Tailors

Shoe and leather workers and repairers

Recreation and Instruction 

Golf caddies

Self-enrichment teachers

Recreational and tour pilots

Tour guides and escorts

Travel guides

Sports and recreation instructors

Transportation and Delivery: 

Parking and valet attendants

Taxi and rideshare drivers and chauffeurs

Shuttle drivers

Goods delivery people

Personal vehicle and equipment cleaners

Private and charter bus drivers

Water taxi operators and charter boat workers

Rickshaw, pedicab, and carriage drivers

Home movers

The requirements for the OBBB tip exclusion are a set of temporary tax deductions for qualified tipped workers, available for tax years 2025 through 2028. The deduction is taken on an individual’s tax return and is subject to income limitations. 

Eligibility Requirements: To be eligible for the deduction, a worker must meet the following criteria: 

Be a qualified tipped worker: Must be an employee or independent contractor in an occupation that customarily and regularly received tips before 2025. See the draft list of qualifying occupations.

Have qualified tips: The tips must be voluntarily paid by a customer. This includes tips received in cash, charged on a credit card, or from a tip-sharing arrangement. Mandatory service charges are not eligible.

Properly report tips: The tips must be reported to the IRS on either a Form W-2 (for employees) or Form 1099 (for independent contractors).

File jointly if married: If married, the couple must file a joint tax return to claim the deduction.

Provide a Social Security Number (SSN):  Anyone claiming the deduction must include their SSN on their tax return.

Deduction Limitations: The maximum deduction is limited and phases out for high-income earners: 

Maximum deduction: The maximum annual deduction is $25,000.

Income phase-out: The deduction is gradually reduced for taxpayers with a modified adjusted gross income (MAGI) over a certain amount:

Single filers: The deduction begins to phase out for MAGI over $150,000.

Married filing jointly: The deduction begins to phase out for MAGI over $300,000.

Other Considerations:

Does not apply to payroll taxes: While tips are deductible from the worker’s income when figuring their federal income tax, they are still subject to Social Security and Medicare taxes or self-employment tax in the case of independent contractors.

Temporary provision: The tip deduction is a temporary measure, scheduled to expire after December 31, 2028.

Not tax-free: This is a deduction, not an exemption. So, the worker will still have to report all tip income, which will then be reduced by the deduction amount.

State tax implications: The effect on state income taxes will depend on the worker’s state’s tax laws.

In conclusion, understanding which occupations qualify for tip deductions is essential for both employees and employers seeking to maximize their tax benefits. By staying informed about the specific criteria that define qualified tips and knowing how different occupations fit into this framework, individuals can ensure compliance while optimizing their tax strategies. As tax laws continue to evolve, it remains crucial for stakeholders to stay updated on legislative changes and seek professional advice as needed to navigate the complexities of tip income and deductions effectively.

Contact our office with questions and assistance.

Vehicle Loan Interest Deduction A Restrained Tax Benefit

In the swirling complexities of tax legislation, even well-intentioned provisions can seem like offers of relief that arrive weighed down with restrictions. The OBBBA provision, which allows taxpayers to deduct up to $10,000 of interest paid on passenger vehicle loans, is poised to be one such measure. On the surface, it beckons with the promise of financial relief; however, for many taxpayers, the reality will be a confounding array of limitations that may render the deduction more symbolic than substantive.

The Limitations: A Narrow Pathway to Eligibility

The introduction of this provision is aimed at providing some respite amid the financial demands of owning a vehicle. Yet, the deductions are not as straightforward as they might appear. A myriad of limitations tightly gird this provision, potentially excluding a significant portion of taxpayers eager for relief.

Personal Use Vehicle: To begin with, the provision caters exclusively to personal-use vehicles weighing in at 14,000 pounds or less. Any vehicle used for business, regardless of necessity or lack of corporate fleets, is unapologetically excluded. This distinction negates opportunities for small business owners or entrepreneurs who often blur the lines between personal and professional vehicle use. Furthermore, the provision applies only to new vehicles—a frustrating restriction for those who consciously choose to buy used cars, perhaps for economic or environmental reasons.

No Recreational Vehicles: Although the definition of a passenger vehicle includes cars, minivans, vans, SUVs, pickup trucks, or motorcycles, recreational vehicles (RVs), fail to meet the criteria for qualified vehicles. Recreational vehicles encompass a variety of motorhomes and campervans.

Vehicle Loan: The demand for the loan to be secured by the vehicle introduces another level of complication. A car must be held as collateral, and while this may not be an unusual requirement for an auto loan, it accentuates the notion of risk rather than relief to the taxpayer.One would think family and friends would be allies in such financial undertakings, but the provision explicitly disallows loans from these sources. Similarly, lease financing is also deemed unfit for this deduction, limiting options for those who prefer or require the flexibility of leasing over buying.

Final Assembly: Perhaps one of the most daunting limitations is the requirement for final assembly of the vehicle to occur within the United States. The globalization of the automobile industry is such that even American brands often have some assembly lines abroad. Consequently, this restriction might serve more as a geopolitical statement than a practical guideline for taxpayers counting on financial relief.Moreover, the mandated list of qualifying vehicles, anticipated from the government, is still merely a promise. Without this list, taxpayers tread uncertain ground, unsure whether their chosen vehicle will ultimately qualify for the deduction.

Highway Use: Adding to the complexity is the constraint that the vehicle must be manufactured for use on public streets, roads, and highways. This means that niche markets—such as those who buy golf carts or other specialized vehicles—will find themselves excluded, with no recourse under the current legislation.

Income Limits: Income levels play yet another confounding role in the eligibility for this deduction. With a ceiling set at a modified adjusted gross income (MAGI) of $100,000 for single filers and $200,000 for joint filers, the phase-out of the deduction looms large. For each $1,000 of income surpassing these thresholds, the deduction diminishes by $200. Once the MAGI reaches $149,000 for single filers or $249,000 for joint filers, the deduction is entirely moot—the provision becomes obsolete for those hovering in the upper limits of the middle class.For instance, consider a single filer with a MAGI of $120,000. For these additional $20,000 over the threshold, the deduction shrinks by $4,000, resulting in a paltry remaining deduction of $6,000. Under these strictures, only taxpayers effectively within the 22% tax bracket can capture any significant benefit, and even then, the reduction in liability seems less than commensurate with the provision’s intent.
Should a taxpayer fall into the more modest 12% tax bracket, the deduction offers little solace—just a $12 decrease in liability for every $100 of interest deducted. In contrast, those in the 22% bracket witness a $22 reduction per $100, underscoring the inequitable assist the provision extends across income levels.

Limited Availability: This provision is temporary, only available in 2025 through 2028 after which terminates unless extended by Congress.

The Enduring Question of Benefit Versus Burden

In the end, the OBBBA provision stands as a complex and confining measure within tax legislation. Its onerous limitations highlight the incongruities in navigating tax benefits—often leaving taxpayers with more questions than answers, and with benefits that seem increasingly out of reach. As it begins its tenure from tax year 2025 through 2028, taxpayers are left to wonder whether this interest deduction is a beacon of relief or an elusive concession under the guise of benefit.

Despite the numerous limitations that encircle the OBBBA provision, there is a bright spot that merits attention: the deduction’s accessibility to both those who itemize their deductions and those who opt for the standard deduction. This flexibility grants a wider net of eligibility, ensuring that taxpayers are not faced with the additional burden of reshaping their entire tax strategy to benefit from this provision. Whether a taxpayer meticulously itemizes every deductible expense or opts for the simplicity of the standard deduction, they have the opportunity to leverage this interest deduction.

Contact our office if you have questions.

Uncertainty Is the New Normal: How Small Businesses Can Stay Steady

The Economy Feels Mixed — and That’s Okay

If you’ve read the headlines lately, you know the signals are…confusing.

GDP is strong.

Interest rates may be heading lower.

Inflation is easing, but not “gone.”

Tariffs are making imports more expensive.

So is the economy strong? Slowing? Recovering? The truth is—it depends on who you ask. And for small business owners, that fog of uncertainty is the hardest part.

Uncertainty isn’t just an economic headline. It’s what keeps you up at night, wondering: Do I hire? Do I wait? Do I raise prices or hold steady?

Why Uncertainty Hurts More Than “Bad News”

When the outlook is unpredictable, planning becomes a guessing game. You can’t control the headlines, but you can control how your business responds. That’s where steady cash flow management, flexible budgets, and advisory support change everything. 

How Small Businesses Can Adapt in Uncertain Times

1. Get a Grip on Cash Flow

Cash flow is your oxygen. Monitor it weekly, not quarterly. Use forecasting tools or dashboards that flag red zones before they become crises.

2. Build Flexible Budgets

Rigid budgets snap in unpredictable markets. Scenario planning—“what if tariffs rise another 10%?”—lets you prepare before costs hit.

3. Diversify Where You Can

From suppliers to revenue streams, diversification lowers risk. Even small shifts—like adding a second vendor—protect your business against shocks.

4. Tier Your Spending Controls

Not every dollar deserves equal treatment:

Must control tightly: payroll, rent, core services.

Flexible: marketing, equipment, travel.

Growth bets: new hires, product launches.

This gives you a clear plan for what to trim (and what to protect) if the ground shifts.

Opportunity Inside the Fog

Uncertainty doesn’t only create risk—it opens doors. When competitors freeze, you can:

Negotiate better supplier terms.

Attract talent that others are too hesitant to hire.

Double down on client loyalty while others cut service.

Strong planning plus calm execution turns uncertainty into opportunity.

The Big Picture: SMB Resilience Wins

Lower rates and moderating inflation could spark growth.

Small business optimism remains cautiously strong.

With smart financial controls, you’ll be positioned to adapt faster than competitors.

Uncertainty isn’t going away. But with the right systems in place, it doesn’t have to run your business.

Next Step

Talk to our firm about building cash flow cushions, forecasting tools, and financial controls tailored to your business. With a plan in place, you’ll feel calmer, more confident, and better prepared for whatever comes next.

Because clarity—even in uncertain times—is a competitive advantage.

Exploring Tax Opportunities to Pay Off Student Loans

Paying off student loans can be a significant challenge for many graduates. However, leveraging tax-advantaged strategies can alleviate some of this burden. In this article, we’ll explore various tax opportunities to help pay off student loans, including Section 529 plans, Section 127 employer payments, and strategies related to paying principal versus interest. We’ll also highlight new provisions and permanency established by the One Big Beautiful Bill Act (OBBBA).

Qualified Tuition Plans: Qualified Tuition Plans (sometimes referred to as Section 529 plans) are plans established to help families save and pay for education expenses in a tax-advantaged way and are available to everyone, regardless of income.

These plans allow taxpayers to gift large sums of money for a family member’s education expenses, while continuing to maintain control of the funds. The earnings from these accounts grow tax-deferred and are tax-free, if used to pay for qualified education expenses. Here’s how they can help manage student loans:

Tax-Free Withdrawals for Educational Expenses: 529 plans offer tax-free withdrawals for qualified educational expenses, including student loan repayments up to a lifetime limit of $10,000 per beneficiary.

Recent Changes Under OBBBA: The OBBBA has expanded the uses of 529 funds. However, it’s important to note that any distributions from a 529 plan made for the purpose of paying student loans will not allow the beneficiary to claim student loan interest deductions.

Employer Payments: With education becoming a key benefit for recruits, many employers offer educational assistance:

What Section 127 Covers: Under Section 127, employers can offer up to $5,250 annually in tax-free educational assistance, which can include student loan repayments.

Permanency Due to OBBBA: This benefit was made permanent by the OBBBA legislation, offering a long-term planning opportunity for employees.

Paying Principal vs. Interest: When deciding how to allocate payments, understanding the tax implications can be crucial:

Interest Deduction: For taxpayers itemizing their deductions, they are allowed to deduct student loan interest up to $2,500 per year. Thus, where possible it would be beneficial to allocate payments from Sec 529 plans and employer payments to principle and the taxpayer to pay the interest.

Strategic Approaches: Balancing payments between principal and interest can optimize both tax benefits and debt reduction speed.

Additional Sources and Methods: Besides Sec 529 and Sec 127, other strategies can also aid in managing student loans:

Public Service Loan Forgiveness (PSLF): The Public Service Loan Forgiveness (PSLF) program is a significant federal initiative designed to alleviate the financial burden of student loans for individuals committed to careers in public service. Established to incentivize and reward employment in essential public sectors, PSLF targets employees working full-time for qualifying employers, including government agencies, 501(c)(3) non-profit organizations, and certain other non-profit entities dedicated to public services. To benefit from PSLF, borrowers must make 120 qualifying monthly payments under a qualifying repayment plan while working with an eligible employer. Unlike many loan forgiveness programs, the PSLF discharges forgiven debt tax-free.

Income-Driven Repayment Plans: Though not directly offering tax benefits, these plans can reduce monthly payments, enabling borrowers to use savings elsewhere, possibly toward tax-advantaged accounts.

State-Level Programs: Some states offer tax incentives or repayment assistance programs for student loans. Check if your state provides such a benefit.

Death or Disability Forgiveness: It’s important to recognize the specific provisions related to student loan discharge under unfortunate circumstances:

Tax-Free Discharge: Typically, student loans discharged upon death or total and permanent disability are excluded from taxable income. Emphasize planning for these situations to ease burdens on family or affected individuals.

OBBBA Amendments: Significant changes have occurred with the OBBBA, where such discharge exclusions are reinforced, ensuring they remain effective well into the future.

Conclusion: A mindful approach to student loan repayment, utilizing various tax-advantaged opportunities and keeping abreast of legislative changes, can dramatically ease the financial pressure. Consultation with a tax professional can further personalize these strategies based on individual circumstances.

A Smarter Way to Read Your Business’s Health: The Balance Sheet Deep Dive

Starting a business is more than revenue and expenses—it’s about knowing what you truly own, what you owe, and what your venture is worth. That’s where a balance sheet comes in: a snapshot that tells the story of your business’s financial condition in a single glance.

Why Every Business Needs a Balance Sheet

A Clear Snapshot, Every Time
A balance sheet lists your assets, liabilities, and equity as of a specific date, showing where your business stands in financial terms. It connects seamlessly with your income and cash flow statements, forming a complete financial picture.

From Guesswork to Smart Moves
Rather than hoping for the best, you’ll see if your cash flow is healthy, if customers are paying on time, or if liabilities are creeping up. A balance sheet helps you catch trouble early and capitalize on strengths.

Assets = Liabilities + Equity: The Core Equation

At the heart of the balance sheet is this simple formula:

Assets = Liabilities + Equity

Assets: Anything you own—cash, equipment, inventory.

Liabilities: What you owe—loans, unpaid bills.

Equity: What’s left for you once liabilities are paid.

Think of it like balancing a scale—everything you own must equal what you owe plus what you’ve earned.

Why Software Beats Spreadsheets

You could track everything manually, but that’s time-consuming and risky. With QuickBooks®, the math happens automatically—your balance sheet stays accurate and always up-to-date, no spreadsheet gymnastics needed.

You can run reports any time and even customize them—filtering by period or type—making review and decision-making smoother than ever.

Balance Sheets in Action: What to Track

Insight Area	What You’ll Learn
Liquidity	Do you have enough cash to pay bills?
Debt Health	Are liabilities growing too fast?
Business Worth	What’s your equity telling you?
Trends Over Time	Is your business growing or slipping?

Balance sheets are powerful tools for spotting trends, planning investments, or just staying on top of your financial game.

We don’t just hand you reports. We help you interpret them, act on them, and plan ahead. With expert guidance from our team, you’ll know exactly where you stand—and where to go next.

Ready for clarity—and confidence?

Book a “Financial Check-In” session with our office today. We’ll help you set up or optimize your balance sheets and use them to drive smart decisions.

Launching a Bright Financial Future: Tax Benefits for Your Children

Setting up a child’s financial future can be one of the most impactful gifts parents, grandparents, relatives, and friends can provide. By leveraging various tax-advantaged accounts and strategies, you can not only contribute to a child’s immediate financial needs but also lay a foundation for lifelong financial security. Here’s a comprehensive look at the options available, including the recently introduced Trump Accounts, Section 529 plans, and other beneficial strategies.

Trump Accounts: A New Tax-Advantaged Tool

Introduction to Trump Accounts - Trump Accounts, established by recent tax reforms, are a novel type of tax-deferred investment vehicle created to encourage savings for children. These accounts can be opened by parents or guardians for children under 18 who are U.S. citizens and have a Social Security number. Contributions can come from various sources, including parents, relatives, employers, non-profit entities, and in some cases the federal government. They are essentially a type of individual retirement account (IRA) but without the requirement that the child have earned income.

Contribution Rules - Annual contributions to Trump Accounts are capped at $5,000 (will be automatically adjusted for inflation). Interestingly, contributions from tax-exempt entities, like foundations, do not count towards this limit, provided they benefit a qualified group of children. It’s important to note that no contributions can be made by anyone once the child reaches age 18. Contributions to Trump Accounts are not tax deductible.

Distribution Guidelines – Generally, distributions from a Trump account cannot be made until the account holder turns 18. However, it’s worth noting that withdrawals of earnings, but not the original contributions, before the age of 59½ are subject to ordinary income tax and a 10% early distribution penalty unless they qualify for any of many exceptions afforded to IRAs.

Government Contributions: To generate interest in the Trump Accounts Congress created a pilot program wherein the federal government contributes $1,000 into the account of every eligible newborn child. This contribution is for U.S. citizens born between January 1, 2025, and December 31, 2028. The contribution is treated as if the child made a $1,000 payment against their income tax, with the amount getting credited back to their Trump Account. This automatic initiative is designed to kick-start savings and investment for the child’s future, encouraging early financial planning and helping families build a foundation for long-term financial growth. Additionally, if the account is not opened by the time the first tax return is filed where the child is claimed as a qualifying child dependent, the Secretary of the Treasury will establish the account on the child’s behalf, ensuring that no eligible child misses out on this benefit.

Timing – It is anticipated that parents (and others) will be able to make the first contributions to Trump Accounts in mid-year 2026. Watch for more details as the government works out the logistics of these new accounts, such as how to establish a Trump Account, over the next few months.

Section 529 Plans: Time-Tested Education Savings

What is a 529 Plan? A Section 529 plan is a tax-advantaged savings account specifically designed to save for education expenses. It provides a platform to accumulate funds that grow tax-deferred and can be withdrawn tax-free when used for qualified education expenses.

Contributions and Gift Tax Considerations:

- Who can contribute? Parents, grandparents, and even family friends can contribute to a 529 plan on behalf of a child. There are no income restrictions on who can open or contribute to these plans.

- Annual Contribution Limits: To avoid gift tax implications, contributions should remain within the annual gift tax exclusion limits, $19,000 per beneficiary (as of 2025) for single filers and $38,000 for married couples.

- 5-Year Lumping Strategy: Contributors can front-load the account by making five years’ worth of contributions at once. This strategy allows up to $95,000 (or $190,000 for married couples) per beneficiary without incurring gift taxes, assuming no other gifts are made during the five years.
  Additionally, if the annual gift tax exclusion increases during this five-year period, contributors have the flexibility to make makeup contributions, aligning with the new exclusion limits, and further enhancing the potential investment into the child’s future education savings.

- Uses and Flexibility: Funds from a 529 plan can be used for a variety of education-related expenses, including tuition, fees, books, and even room and board when attending college. Recent law changes have expanded the allowable use of 529 plan funds to include up to $20,000 ($10,000 if paid before July 4, 2025) per year for K-12 tuition and related expenses. Costs of certain apprenticeship programs are also eligible. If the original beneficiary doesn’t need the funds, the account owner can change the beneficiary to another family member.

- Rollover Opportunities: In situations where the funds in a 529 plan exceed educational needs, the Secure Act 2.0 allows rollovers of up to $35,000 from a 529 plan to a Roth IRA for the beneficiary, provided the 529 has been open for at least 15 years. This option ensures that the savings are not wasted and continue to benefit the recipient’s financial health.

Employing a Child in Family Business: The Benefits: Engaging a child in meaningful work within a family business or elsewhere not only instills a strong work ethic but also presents various tax advantages.

Income Tax Benefits:

- Reasonable Compensation: For employing a child in a parent’s business, the child can earn up to the standard deduction amount tax-free. For 2025, this is $15,750, meaning the child doesn’t have to pay federal income tax on earnings below this threshold.

- Business Deductions: The wages paid to children can be deducted as a business expense, which helps reduce the taxable income of the business and potentially lowers overall tax liability. Additionally, if the parent’s business is not incorporated—meaning it operates as a sole proprietorship or a partnership where both partners are the child’s parents—the wages paid to the child are not subject to FICA taxes (Social Security and Medicare taxes) if the child is under the age of 18, providing an added tax advantage by lowering employment tax expenses.

Retirement Account Contributions: A child’s earned income opens the door to funding a retirement account early.

- Roth IRA: If they have earned income, children can contribute to a Roth IRA, up to the lesser of their earned income or the annual contribution limit ($7,000 for 2025). The contributions grow tax-free, and withdrawals in retirement are also tax-free, providing a significant financial advantage.
  A Roth IRA is often considered an excellent choice for children with minimal taxable income due to several unique features and benefits:
  
  §  Tax-Free Growth: Contributions to a Roth IRA are made with after-tax dollars, and the investments grow tax-free. Given that children are likely in the lowest tax bracket, the tax-free growth aspect is highly beneficial over the long term.
  
  §  Tax-Free Withdrawals in Retirement: Qualified withdrawals from a Roth IRA are tax-free, which means that both the contributions and the substantial growth that can occur over decades are not taxed upon withdrawal, maximizing the money available in retirement.
  
  §  Flexibility: Contributions (but not earnings) to a Roth IRA can be withdrawn at any time for any reason without penalty or taxes. This accessibility makes it a flexible option if the child needs the money for unplanned expenses.
  
  §  Maximizing the Power of Compounding: Starting a Roth IRA early gives the investments more time to benefit from compound interest. Even small contributions can grow significantly over a long period, creating a sizable nest egg for retirement.
  
  §  No Required Minimum Distributions (RMDs): Unlike traditional IRAs, Roth IRAs do not require minimum distributions during the account holder’s lifetime. This allows funds to potentially grow untouched or be passed on to heirs.
  
  §  Earning Income Requirement: Opening a Roth IRA for a child requires that the child have earned income. Encouraging children to earn and contribute to their own retirement funds can instill a savings habit and financial responsibility early on.
  
  These features make the Roth IRA an appealing option to begin a child’s journey toward financial independence and retirement savings, especially when their income is low and the tax impact is minimal.

Additional Strategies: Other Financial Boosts

Saving for Retirement Early: Even minors are eligible to have a Roth IRA if they have earned income.

Teaching Financial Responsibility: Encouraging savings habits early, whether through structured accounts like a Trump Account and 529 plans or personal savings programs, fosters lifelong financial discipline.

Encouraging Entrepreneurial Ventures: If your child shows interest in launching their own small business or providing services, such as tutoring or dog walking, this experience can also lead to early financial growth, teach important money management skills, and generate income that can fund savings or retirement accounts.

Conclusion: The array of financial vehicles available today, from Trump Accounts to 529 plans and beyond, offer a robust toolkit for shaping a child’s financial future. These options not only help in covering educational and immediate expenses but also build a financial framework that supports investment acumen and retirement savings. By taking full advantage of these tools, those eager to support a child’s financial journey can effectively set them on the right foot for a prosperous future. Whether it’s starting a savings account, employing them in a family business, a summer job, or ensuring their education is funded, these strategies cement a legacy of financial security and prudence that will benefit future generations.

If you have questions related to any of these tax benefits, please contact our office.

Got an IRS Notice? Here’s How to Handle It Without Losing Sleep

Few things can rattle a business owner faster than seeing “Internal Revenue Service” on an envelope. The instinct is to panic. But the truth? An IRS notice doesn’t automatically mean you’ve done something wrong.

In 2025, notices are more common than ever. Many are generated automatically when systems flag something for review — a missing form, a math discrepancy, or a question about deductions. The real danger isn’t the letter itself — it’s how you handle it.

Why the IRS Sends Notices

Notices may arrive for reasons such as:

Adjustments to income or deductions reported

Questions about tax credits or payments

Mismatched data between your return and third-party reporting

Requests for additional documentation

The IRS wants clarification — not confrontation. But if the notice is ignored or mishandled, small issues can grow into costly problems.

What Not to Do

Don’t ignore it. Penalties and interest grow quickly.

Don’t call the IRS unprepared. Miscommunication is common.

Don’t guess. A hasty response can make matters worse.

What You Should Do Right Away

Open the notice immediately. Understand the issue and the deadline.
Gather supporting documents. Returns, statements, and receipts matter.
Reach out to our office. As experienced advisors, we know how to translate IRS language and respond effectively.

Why Acting Quickly Matters

Every missed deadline limits your options — and every day you wait adds stress that pulls you away from running your business. Timely action often means quick resolution, sometimes without even writing a check.

Let’s Handle This Together

Your time should be spent growing your business — not losing sleep over an IRS letter. We’ll work with you to respond correctly, protect your bottom line, and put this issue behind you.

Unravelling Education Savings: Mastering 529 Plans to Maximize Tax Benefits

Section 529 plans are tax-advantaged savings plans designed to encourage saving for future education costs. They are legally known as “qualified tuition plans” and are sponsored by states, state agencies, or educational institutions. With rising education expenses, these plans offer a valuable option for families to invest in the future of a child’s education. Let’s delve into the specifics of who can contribute, the contribution limits, and the various uses of these funds, including recent updates under the “One Big Beautiful Bill” Act (OBBBA).

Who Can Contribute? A 529 plan can be funded by anyone—parents, grandparents, relatives, or friends. There is no restriction on who can make contributions, or what the contributor’s income is, as long as the total contributions for the beneficiary do not exceed the plan’s limits. This flexibility makes 529 plans a popular gift option for birthdays, holidays, or special occasions.

Maximum Contribution Without Gift Tax: Contributions to a 529 plan are considered gifts under the federal tax code. As of 2025, individuals can contribute up to the annual gift tax exclusion limit of $19,000 per beneficiary without triggering the requirement to file a gift tax return. This amount is adjusted annually for inflation, allowing for potential increases in future years. For example, a married couple could contribute a total of $38,000 to their grandchild’s 529 plan in 2025, provided they hadn’t made other gifts to the grandchild that reduced the available gift tax exclusion.

The 5-Year Advance Contribution Rule: One of the unique features of 529 plans is the ability to “superfund” an account by front-loading contributions. This rule allows individuals to contribute up to five times the annual gift tax exclusion amount in a single year without incurring gift taxes, provided they do not make additional gifts to the same beneficiary over the subsequent four years. For 2025, this means contributing a lump sum of up to $95,000. Superfunding a 529 plan while the intended beneficiary is young will allow the funds to grow tax free for a longer time.  

Additional Contributions During the 5-Year Period: If the annual gift tax exclusion limit increases during the five-year period after a lump-sum contribution has been made, it is possible to make an additional contribution up to the new limit without incurring gift taxes. For instance, if the limit increases due to inflation adjustments, contributors can take advantage of the increased exclusion amount.

State Limitation on Sec 529 Contributions: The maximum contribution limit for Section 529 plans can vary significantly by state, as each state sets its own limit based on its estimates of the future costs of education. However, the typical range for maximum account balances across most states is from $235,000 to over $550,000 per beneficiary. It’s crucial to check the specific limit for the state plan you are interested in, as these caps are intended to cover qualified education expenses and are periodically adjusted to account for rising education costs. Also, of note: individuals are not limited to plans from their home state.

Paying Tuition Directly and Avoiding Gift Tax Issues: Grandparents often play a pivotal role in supporting a child’s educational journey, and many might contemplate utilizing their personal investment strategies to fund a family member’s education, believing they can achieve better returns than a 529 plan offers. However, for those who prioritize giving substantial financial support without impacting gift tax implications, it’s important to understand the benefits of direct tuition payments. The gift tax rules provide a strategic advantage by not considering the direct payment of tuition to an educational institution as a taxable gift. This allows grandparents to pay tuition bills directly without incurring gift tax consequences, enabling them to simultaneously maintain their investment portfolios while contributing significantly to a grandchild’s education in a tax-efficient manner. This approach not only aids in reducing estate value but also maximizes support for education without impinging upon annual gift tax exclusion limits.

Qualified Uses of 529 Plan Funds: 529 plan funds can be used for a vast range of educational expenses. These include:

Tuition and fees for college, university, or eligible postsecondary institutions.

Books, supplies, and equipment required for courses.

Computers, peripheral equipment and internet access.

Special needs services for a beneficiary with special needs, necessary for enrollment or attendance.

Room and board for students enrolled at least half-time.

K-12 Education: The OBBBA has expanded the use of 529 plans to cover more K-12 education expenses, permitting tax-free distributions of up to $20,000 annually per beneficiary for tuition and related expenses at public, private, or religious schools, starting January 1, 2026. From 2018 through 2025 only tuition of up to $10,000 per year was allowed as a tax-free distribution for K-12 expense. Among the newly eligible expenses are books or other instructional materials, online educational materials, tuition for tutoring or educational classes outside of the home, fees for achievement tests and advanced placement tests, and fees related to enrolling in colleges and universities.

Apprenticeships and Additional Education Expenses: New provisions under the OBBBA and other recent legislation have expanded the types of qualified expenses to include costs associated with registered apprenticeship programs and “qualified postsecondary credentialing expenses.”

Taxation and Penalties on Non-Qualified Distributions: While 529 plans offer tax-free growth and withdrawals for qualified expenses, distributions not used for qualified education expenses are subject to income tax and a 10% penalty on the earnings portion. The contributions, which were made with after-tax dollars (i.e., they weren’t tax deductible), are not taxable, but the appreciation of those contributions is.

The IRS does offer exemptions from the 10% penalty in certain situations, such as if the beneficiary receives a scholarship. In these scenarios, the penalty is waived, although the earnings would still be subject to income tax.

Rollover Options:

Rollover to an ABLE Account - Under the ABLE Act, funds in a 529 plan can be rolled over into an Achieving a Better Life Experience (ABLE) account for the same beneficiary or a qualifying family member without incurring income taxes or penalties. This option allows for flexibility if the original beneficiary needs support for disability-related expenses rather than educational costs.

IRA Rollover for Unused Funds - The SECURE Act 2.0 introduced a provision allowing up to $35,000 in leftover 529 plan funds to be rolled over into a Roth IRA for the designated beneficiary. This provides a way to utilize any excess funds that were originally earmarked for education by rolling the excess amount into a tax-advantaged retirement account. However, eligibility for a Roth IRA and contribution limits remain applicable, and the $35,000 rollover limit is a lifetime limit.

In conclusion, Section 529 plans offer a multifaceted and flexible approach to saving for education. They provide tax advantages while allowing contributors to offer significant support for a beneficiary’s educational journey. With recent legislative updates, such as those under the OBBBA, the scope and utility of 529 plans have expanded, encompassing a wider array of educational uses and offering additional financial planning options through rollovers to ABLE accounts and IRAs. As education costs continue to rise, these plans remain an essential tool for families planning for the future.

Consulting with a tax professional can provide invaluable assistance in providing personalized advice tailored to individual circumstances, helping to optimize educational savings strategies and ensure compliance with gift tax rules. If you’re considering a strategy involving 529 plans, reaching out to our office is a prudent step to ensure your plan aligns with current tax laws and best practices.