Cross-training to ensure more than one person knows key functional areas can be a win-win situation for you and your employees. Large companies often use it to prepare managers for future promotions. But in small companies, cross-training can be a great way to mitigate risk.
How you implement cross-training will depend on the size and nature of your business. Consider prioritizing the departments that need and/or want cross-training the most. These departments may be understaffed or have many new employees. Look for important functions that are currently dependent on a single person’s knowledge. These areas should be a focus of your cross-training program.
As you implement a cross-training program, here are a few tips to help you along the way:
Document your key processes. You cannot cross-train if you don’t know the process. These written processes will turn into training documents as you implement your program. So your first step is identifying key processes and procedures and having your current people that are doing these functions to get them down on paper or documented through short videos.
Communicate to your team. Get everyone in step before starting a cross-training program. Help your team understand why the company is cross-training your team. Reasons may be to prepare for organizational growth or new industry standards, to cover functions when someone is on vacation, or to adjust to a changing structure that’s focused around roles and responsibilities. Then continue to communicate with your team throughout the process with status updates and next steps.
Present cross-training as an opportunity. Your employees may be more resistant to cross-training if it feels like it’s an obligation or a threat to their roles. You can help them feel motivated by highlighting the benefits, like developing different skill sets and having a better understanding of how their contributions positively impact other parts of the business.
Start with a small pilot program. Test the waters with a select group of employees to get a better understanding of what works and what needs to be tweaked. You can then expand the program later as you gain insight and experience.
Determine cross-training hours. Figure out how much time can be dedicated to cross-training for each team to still run efficiently. This may include setting aside a few hours each day, or setting aside full days for a certain period of time to focus on cross-training. If your business is seasonal, ramp up cross-training during your low seasonal period.
Listen to feedback. You may learn that some employees have already started cross-training on their own. You can use this kind of valuable feedback to fine-tune your official cross-training program.
Keep in mind that some employees may resist having to train others, and productivity may suffer in the short-term. But remember the cost of not cross-training – if you lose a key employee and no one else knows how to do their tasks, your business may have trouble finding a replacement.
As 2023 winds down, here are some ideas to help you prepare for filing your upcoming tax return:
Informational returns. Identify all vendors who require a 1099-MISC and a 1099-NEC. Obtain tax identification numbers (TINs) for each of these vendors if you have not already done so.
Shifting income and expenses. Consider accelerating income, or deferring earnings, based on profit projections.
Be prepared to receive a Form 1099-K. You may receive a Form 1099-K from each payment processor from whom you receive $600 or more in payments. In addition to credit card companies and banks, payment processors can include Amazon, Etsy, PayPal, Venmo and Apple Pay. You’ll need to include the 1099-K on your tax return.
Categorize income and expenses. The best way to prepare for receiving a 1099-K is to organize your records by major categories of income, expenses and fixed asset purchases. If your accounting records are accurate, then any tax form, including a 1099-K, should be easy to tie out to your books.
Separation of expenses. Review business accounts to ensure personal expenses are not present. Reimburse the business for any expenses discovered during this review.
Create expense reports. Having expense reports with supporting invoices and business credit card statements with corresponding invoices will help substantiate your deductions in the event of an audit.
Fixed asset planning. Section 179 or bonus depreciation expensing versus traditional depreciation is a great planning tool. If using Section 179, the qualified assets must be placed in service prior to year-end.
Leveraging business meals. Business meals with clients or customers are 50% deductible. Retain the necessary receipts and documentation that note when the meal took place, who attended and the business purpose on each receipt.
Charitable opportunities. Consider any last-minute deductible charitable giving including long-term capital gain stocks.
Cell phone record review. Review your telephone records for qualified business use. While expensing a single landline out of a home office can be difficult to deduct, cell phone use can be documented and deducted for business purposes.
Inventory review. Review your inventory for proper counts and remove obsolete or worthless products. Keep track of the obsolete and worthless amounts for a potential deduction.
Review your receivables. Focus on collection activities and review your uncollectible accounts for possible write-offs.
Review your estimated tax payments. Recap your year-to-date estimated tax payments and compare them to your forecast of full year earnings. Then make your 2023 4th quarter estimated tax payment by January 16, 2024.
There are many tax benefits built into home ownership. Here is a review of the most common.
The home gain exclusion. When you sell an asset for a profit, it creates a taxable event. If the asset, though, is your primary residence, you can exclude up to $250,000 ($500,000 if married filing jointly) of these gains. Special rules do apply, but this is a major tax benefit of home ownership.
How to take advantage: You must live in your house for at least 2 of the previous 5 years to qualify for the home gain exclusion. Start planning now if you think you’ll be selling your house in the near future so you can qualify for this tax break.
Itemized deductions. Mortgage interest and property taxes are two deductions you can claim as a homeowner. The interest is deductible on the first $750,000 associated with loans secured by your primary and secondary residences ($1 million for mortgages underwritten prior to 2018), while up to $10,000 of property taxes may be deducted. You may also deduct points paid as an itemized deduction over the life of your mortgage.
How to take advantage: You need to itemize your deductions to take advantage of these tax breaks. Consider bunching your mortgage interest and property taxes with other itemized deductions such as charitable contributions, taxes and excess medical expenses to try and exceed the standard deduction for your filing status.
Free rental income. You can rent out your home for up to two weeks and not claim the income. While you cannot deduct expenses in this scenario, this is a great tax break if your home is located next to a popular landmark or a major event.
How to take advantage: Keep track of how many days you rent out your home so you don’t go over the 14-day limit. If you rent your house for just 15 days over a given year instead of 14, you’ll owe taxes on all rental income for that year, including the first 14 days.
Home office deduction. If you use a portion of your house exclusively as a home office, you may be able to deduct certain expenses such as mortgage interest, insurance, utilities, & repairs.
How to take advantage: To qualify for the deduction, you generally must use this portion of your house exclusively for business purposes on a regular basis. So be sure to understand the limitations of this deduction.
Your house is a great place to control the amount of tax you owe, but only if you know the rules and can apply these rules to your situation. Use this information as a starting point to see if there are ways to leverage your home’s tax benefits.
Back by popular demand is this season’s holiday movie and TV trivia quiz! So while you’re waiting for your holiday dinner or just resting after a wonderful feast, break out this quiz to share with family and friends. Enjoy!
The song White Christmas, performed by Bing Crosby, was sung in a number of movies. In which movie did the song make its debut?
Holiday Inn. The song White Christmas was released in 1942 as part of the movie Holiday Inn. Many think that the song debuted in the movie titled with the same name. While extremely popular, the movie White Christmas was created in part to leverage the popularity of the song.
Bonus: Who won an Oscar for writing White Christmas? A: Irving Berlin
In the movie It’s a Wonderful Life, what happens every time a bell rings?
An angel gets it’s wings…
Bonus: What was the name of the angel? A: Clarence
In the movie Home Alone, the family is going on vacation and accidentally leaves Kevin behind. Where were they going?
Paris
Bonus: Give yourself a point if you can name either of the thieves in the movie. A. Harry (Joe Pesci) and Marv (Daniel Stern)
In the movie How the Grinch Stole Christmas, what three words are used to describe the Grinch?
Stink, Stank, Stunk
Bonus: Who voiced the Grinch in the famous cartoon? A: Boris Karloff, who appeared in 174 films and is known for his role as the original Frankenstein, won a Grammy award for portraying the Grinch and narrating How the Grinch Stole Christmas.
Tom Hanks played six different roles in this popular holiday movie.
The Polar Express
Bonus: The Polar Express had a number of firsts. Name any one of them for a bonus point. • First full-length animated movie released in IMAX format. • First full-length movie to use animated 3D capture technology allowing creation without drawing each individual frame. • First movie to be released with a Dolby Digital 5.1 soundtrack. • First animated movie to have a song nominated for an Academy Award. The song was titled Believe.
In the movie A Charlie Brown Christmas, what does Charlie Brown do poorly that turns out all right in the end?
He buys a sad-looking tree. But in the end everyone gets the Christmas spirit and wishes Charlie Brown a Merry Christmas. Linus sums up the feeling: I never thought it was such a bad little tree. It’s not bad at all, really. Maybe it just needs a little love.
Bonus: Name the comic strip made famous by Charlie Brown and its creator Charles Schulz. A. Peanuts
May you and yours enjoy the holiday season with peace and joy.
Results:
11 to 12 points: Deck the Halls! You are awesome.
8 to 10 points: You are dashing through the snow…no walking for you!
4 to 7 points: Ho! Ho! Ho! You are having fun besides watching holiday movies.
0 to 3 points: Holidays? What Holidays? Pass me a cookie, would you please?
As 2023 winds down, here are some ideas to help you prepare for filing your upcoming tax return:
Informational returns. Identify all vendors who require a 1099-MISC and a 1099-NEC. Obtain tax identification numbers (TINs) for each of these vendors if you have not already done so.
Shifting income and expenses. Consider accelerating income, or deferring earnings, based on profit projections.
Be prepared to receive a Form 1099-K. You may receive a Form 1099-K from each payment processor from whom you receive $600 or more in payments. In addition to credit card companies and banks, payment processors can include Amazon, Etsy, PayPal, Venmo and Apple Pay. You’ll need to include the 1099-K on your tax return.
Categorize income and expenses. The best way to prepare for receiving a 1099-K is to organize your records by major categories of income, expenses and fixed asset purchases. If your accounting records are accurate, then any tax form, including a 1099-K, should be easy to tie out to your books.
Separation of expenses. Review business accounts to ensure personal expenses are not present. Reimburse the business for any expenses discovered during this review.
Create expense reports. Having expense reports with supporting invoices and business credit card statements with corresponding invoices will help substantiate your deductions in the event of an audit.
Fixed asset planning. Section 179 or bonus depreciation expensing versus traditional depreciation is a great planning tool. If using Section 179, the qualified assets must be placed in service prior to year-end.
Leveraging business meals. Business meals with clients or customers are 50% deductible. Retain the necessary receipts and documentation that note when the meal took place, who attended and the business purpose on each receipt.
Charitable opportunities. Consider any last-minute deductible charitable giving including long-term capital gain stocks.
Cell phone record review. Review your telephone records for qualified business use. While expensing a single landline out of a home office can be difficult to deduct, cell phone use can be documented and deducted for business purposes.
Inventory review. Review your inventory for proper counts and remove obsolete or worthless products. Keep track of the obsolete and worthless amounts for a potential deduction.
Review your receivables. Focus on collection activities and review your uncollectible accounts for possible write-offs.
Review your estimated tax payments. Recap your year-to-date estimated tax payments and compare them to your forecast of full year earnings. Then make your 2023 4th quarter estimated tax payment by January 16, 2024.
Here are moves you can make to reduce your taxable income. But the year is quickly coming to a close, so plan accordingly.
Max out pre-tax retirement savings. The deadline to contribute to a 401(k) plan to get a 2023 taxable income reduction is December 31st. So if your employer’s plan allows it, consider making a last-minute lump sum contribution. For 2023, you can contribute up to $22,500 to a 401(k), plus another $7,500 if you’re age 50 or older. Even better, you have until April 15, 2024, to contribute up to $6,500 into a traditional IRA. And as long as your income does not exceed phaseout limits, you can reduce your taxable income on your 2023 tax return.
Convert to a Roth IRA. Consider converting some or all of your traditional IRA, SEP IRA, or SIMPLE IRA into a Roth IRA. Although you pay income tax on the amount of the Roth conversion the year it is made, subsequent growth is tax-free in a Roth IRA, and withdrawals from the account are 100% tax-free after five years from the date of the conversion.
Tax loss harvesting. If you own stock outside a tax-deferred retirement plan, you can sell your under-performing stocks by December 31st and use these losses to reduce any taxable capital gains. If your net capital losses exceed your gains, you can net up to $3,000 against other income such as wages. Losses over $3,000 can be used in future years.
Selling appreciated assets. Consider selling appreciated assets in the tax year that helps you the most. While this strategy may be hard to accomplish this late in the year, it is still worthy of consideration. To do this, estimate your current year’s taxable income and compare it to next year’s projected income. Then sell the appreciated asset in the year that will yield the lowest tax. Remember to account for the 3.8% net investment income tax in your estimates.
Review health spending accounts. If you participate in a Health Savings Account (HSA), try to maximize your annual contribution to reduce your taxable income. Remember, these funds allow you to pay for qualified health expenses with pre-tax dollars. More importantly, unlike Flexible Spending Accounts (FSA), you can carry over all unused funds into future years. If you do have an FSA, you can carry forward a maximum of $610 from 2023 into 2024 if your plan allows this. The deadline for contributing to your Health Savings Account (HSA) and still getting a deduction for the 2023 tax year is April 15, 2024. The maximum contribution for 2023 is $3,850 if single and $7,750 for married couples. If you’re age 55 or older, you can add $1,000 to your HSA contribution.
While the year is quickly coming to an end, there is still time to reduce your 2023 tax liability, but only if you act now.
Companies want to make it easy to buy their big ticket items, especially at times of economic uncertainty. A popular technique is to offer 0% financing when you buy furniture, electronics and other household items. You can also take matters into your own hands with a credit card that offers 0% APR on purchases, balances transferred to the card, or both.
While paying for goods and services with 0% interest may sound appealing, there are risks you’ll face that you should be aware of before you take this step.
What’s hiding behind 0% financing
Here are some of the potential problems hiding behind these 0% financing offers:
Special financing offers make it easier to overspend. Psychology Today reported that credit card use can easily result in overspending, and the same is true for loans. The key is to understand the monthly payments you are committing to, and ensuring you can handle them. At the same time, try to assess your purchase decision. Would you buy this item if the 0% offer was not available?
Some 0% APR offers come with deferred interest. Hidden in the fine print of some 0% interest offers may lurk deferred interest charges. This means that while you’re enjoying monthly payments with no interest, the interest charge accrues over time. If you miss a payment, have a late payment or haven’t paid off the loan by the end of the 0% offer period, the accrued interest gets added to your unpaid balance. The key is to precisely understand what happens if you miss a payment or don’t follow the 0% offer exactly as written…before you take the 0% offer.
The 0% offer may be impacting the price. Remember, money has value and someone is paying the interest cost of the 0% financing. Usually the merchant is hiding the cost inside the price you are paying for the item.
What you can do
Before considering a 0% interest financing offer on your next purchase, do this:
Save up for large ticket purchases. Instead of financing items and ensuring you have even more bills to pay each month, start saving for pricier purchases on a regular basis. Even better, leverage the value of your savings within higher interest savings account options that are now in excess of 4 percent.
Turn on your negotiating switch. Whenever you see a 0% offer, there should be a discount available to you for paying upfront. Someone is paying the interest and it is probably going to be you if the financing cost is built into the price you are paying.
Pay on time! Finally, if you do think the 0% option is a deal for you… set up auto payments. Most of these deals are unforgiving and punitive if you miss a payment, so automate them to avoid this possibility.
Understanding how our tax system works can be tricky for anyone. Whether you’re an adult who never paid much attention to the taxes being withheld from your paycheck or a kid who just got his or her first job, the starting point to reducing your tax is knowing when to ask a question. But that means having a basic understanding of what might be taxed.
Here are some pointers to help you or someone you know navigate our tax maze.
There are many types of taxes
When you think of taxes, the income tax usually comes to mind. This is a tax on personal and business income you earn from performing a job, or providing a product or service. But there are also other types of taxes besides income taxes. Here are some of the most common.
Payroll taxes. While income taxes can be used to pay for pretty much anything the government needs money for, payroll taxes are earmarked to pay for Social Security and Medicare benefits. This is 15.3% of most employee’s paycheck, but half of it is paid by your employer.
Property taxes. These are taxes levied on property you own. The most common example is the property tax on a home or vacation property.
Sales tax. These are taxes on goods and services you purchase. While most of this tax is applied at the state and local levels, there are also federal sales taxes on items like gasoline.
Capital gains taxes. If you sell an investment or an asset for a profit, you may owe capital gains taxes. The most common example of this is when you sell stock for a gain. Capital gains taxes could also come into play with other assets, such as selling your home or a rental property you sell for a profit.
Estate taxes. This tax is applied to assets in your estate after you pass away.
Not all income is subject to tax
Most, but not all, of your income is subject to tax.
While your paycheck is subject to taxes, interest earned from certain municipal bonds is not. And the government often excludes things like certain life insurance benefits.
Capital gains taxes have exclusions for gains on the sale of your home and donated stock.
Estate taxes have an exclusion, so only estates in excess of this exclusion amount are taxed.
Many employee benefits such as health care, Health Savings Account contributions, commuting benefits and small gifts from your employer are tax free.
The rules around these different types of taxes is complex. Having someone in your corner to help you navigate your tax obligation is often an essential element in minimizing how much tax you do have to pay. It is also helpful, though, for you to understand the basics so you know when to ask a question.
Working more than one job can help maximize income, but also potentially create a tax surprise. Here are several be aware of:
Social Security Surprise: As a full-time employee, the most you’ll have to pay in Social Security taxes in 2023 is $9,932. The problem is each employer you work for will withhold Social Security taxes up to this threshold.
Example: Jane Smith works two jobs. Employer #1 has withheld $6,000 in Social Security taxes so far in 2023, while Employer #2 has withheld $4,000. Jane has already paid more than the annual limit of $9,932 in Social Security taxes for 2023. Jane will get back the excess Social Security taxes, but she’ll need to wait until she files her 2023 tax return in 2024.
What you can do: Work as a contractor for your second job. You’ll be responsible for paying your own income, Social Security and Medicare taxes, but you’ll be able to manage Social Security taxes to avoid overpayment.
Phaseout Surprise: As your income increases, the number of deductions and tax credits available to you will get smaller as benefit phaseout limits are reached.
Example: The Child Tax Credit provides a $2,000 tax credit for each qualifying child. You don’t qualify for this credit, however, if you file a joint tax return with taxable income above $440,000, or are single and file a return with taxable income above $240,000.
What you can do: Certain deductions and adjustments can help decrease taxable income below a phaseout’s limit. This will potentially allow you to still take advantage of a tax break, such as the Child Tax Credit.
Benefits Surprise: Every retirement and medical account limits how much you can contribute annually. If you exceed these limits, you may have to pay taxes twice on the same income.
Example: The 401(k) contribution limit in 2023 is $22,500. You inadvertently contribute $27,500. The first $22,500 of contributions won’t be taxed until you start making withdrawals after you retire. The excess $5,000 contribution could be taxed twice – you must include the $5,000 as taxable income on your 2023 tax return; you’ll also pay taxes on that $5,000 when you withdraw it from your 401(k) after you retire.
What you can do: Correct any over-contribution before filing that year’s tax return. Up-to-date record keeping throughout the year can alert you to when you’re close to the annual contribution limit.
Estimated Tax Surprise: If your extra job is a contract position, you’ll receive a Form 1099 summarizing how much you billed a particular client in all of 2023. If this is the first time receiving a 1099, you may be surprised to learn that you’re responsible for making all tax payments to the IRS. If you are making a net profit, tax payments for 2023 will need to be made in September and January 2024.
What you can do: Estimated tax payments can sometimes be rather large, especially if you’re making a decent amount of money, so keep good bookkeeping records so you can budget for these payments.
Please call if you have questions about these or any other job-related tax topics.
If you’ve been feeling the pinch of higher auto insurance rates along with other rising costs, you should know some factors that impact these rates are well within your control. Consider these tips to pay less this year and beyond.
Improve your credit score. Many insurance companies consider your credit score and overall creditworthiness when assigning rates, mostly because their research shows credit scores directly correlate with how much risk you pose as a driver. This means that if you want to pay less for auto insurance coverage, you should strive to increase your credit score or move your policy to an insurer that does not use this factor in determining rates. Some easy ways to increase your credit score include using less than 20% of your credit line on your credit cards and by paying all your bills on time.
Ask about discounts. Some auto insurance companies have discounts that are not actively promoted. These are often missed by long-time policy holders that do not specifically ask for them. Examples of discounts include lower rates for being a good student, driving fewer miles, purchasing a car with a lower claim history, or discounts for having air bags, anti-lock brakes, and theft detection devices. There are even discounts for federal employees, military members and for being accident-free for a certain number of years.
Pay premiums in advance. Some auto insurance companies also offer pay-in-full discounts that let you save when you pay for six months or a full year of premiums upfront. This discount can result in 10% to 20% lower premiums right off the bat.
Bundle multiple policies. You may be able to score a discount for having multiple types of coverage with a single insurance company, just as you may get a multi-vehicle discount for having more than one car insured. Typical bundled policies include life insurance, auto insurance, home insurance and umbrella coverage.
Tweak your deductible. Your auto insurance deductible — or the amount you pay for certain claims before coverage kicks in — also plays a role in the cost you pay for auto coverage, and higher deductibles can lead to savings. With that in mind, check how your premiums change if you increase your deductible from $500 to $1,000, from $1,000 to $2,500, and so on.
Take a safe driving course. Finally, taking a safe driving course can help lock in lower auto insurance premiums no matter your age or driving history. The amount of savings you’ll get with this discount can vary, so ask your insurer.
Auto insurance rates may not be going down any time soon, but the steps you take now can help you pay lower rates from this point forward. By improving your credit, checking for discounts and tweaking your policy details, you can get the coverage you need for a price you can afford.
