Confident that the U.S. economy is on firm footing, the Federal Reserve Board has begun gradually increasing interest rates and plans to do so at least two-to-three more times this year with additional increases in 2018. Along with the average consumer, businesses will soon begin to feel the effects in some obvious and not-so-obvious ways. This is especially true for small business (defined as those with 500 or fewer employees) who own or employ about half of the American workforce.
There’s no question that finding good employees for your CNC shop is challenging – as is holding onto them. Employees leave companies for a variety of reasons including uncertainty about their financial futures, particularly their ability to someday retire comfortably. One way to relieve this concern is to establish a 401 (k) plan. The IRS has specific guidelines for such plans, but in general here’s how they work:
Let’s say you’re a CNC shop owner looking for new ways to compliment your existing business. Or, perhaps, you have an itch to add a new business to your portfolio. In either case you can start from scratch, or acquire an existing enterprise.
Succession Planning Question 6: What about insurance and buy-sell agreements?
Succession Planning Question 5: How sound are your financial statements?
Succession Planning Question 3: How much is your business worth?
In the past few years, businesses waited all year long to find out if Congress would increase the standard 179 deduction limited from $25,000 to a larger amount. This made it difficult to plan significant year-end purchases—often leaving buyers scrambling to negotiate deals and take delivery in the midst of the holiday break.
When you run a CNC machine shop there’s always a lot on your plate. You deal with employee issues, job deadlines, working with suppliers and, of course, keeping the pipeline filled with work.
As has become its pattern, the United States Congress waited until the 11th hour of 2015 to approve the Section 179 deduction of business equipment for 2016. The good news is that this means you can write off up to $500,000 of manufacturing equipment put into service by December 31, 2016. Had this legislation failed to pass and be signed into law by the President, the 179 deduction limit would have been capped at $25,000.
As the new Congress takes shape there will likely be a number of tax issues that will be impacted by legislation. Like it or not, new tax laws and extensions or curtailments of existing programs may affect your manufacturing business. It’s best to keep in close contact with your trusted tax advisor as you move into 2015. Here are 7 important areas to keep an eye on: