Here’s something most young entrepreneurs don’t realize:
The year you buy a business is often one of your lowest taxable income years, which creates a rare tax planning opportunity.
Instead of just surviving year one, you can use it strategically, potentially reducing your lifetime tax liability by making one smart move: a Roth conversion.
Let’s break it down.
First Year Business Owner Tax Tip: Convert Your 401(k) Read More »
Operating a small business from home offers flexibility, convenience, and meaningful tax advantages. One of the most valuable benefits available to U.S. small business owners is the home office deduction. However, while the deduction can lower taxable income, it must be handled carefully. Misunderstanding the rules, miscalculating expenses, or failing to document properly can create unnecessary IRS scrutiny and financial consequences.
Many business owners either overclaim the deduction or avoid it entirely out of fear. The reality is that the IRS allows this deduction when it is calculated correctly and supported with proper records. Understanding the most common home office tax deduction mistakes
Avoid Tax Trouble: Common Home Office Deduction Mistakes Read More »
As a small business owner, tax season can be stressful, especially if you need extra time to organize your paperwork. Many entrepreneurs assume that filing a business tax extension payment deadline for small business automatically gives them more time to pay what they owe. Unfortunately, that’s not true. Understanding the difference between filing and payment deadlines is critical to avoid costly IRS penalties and interest. So, what is a business tax extension? A tax extension is a request to delay your filing deadline, not your payment deadline. For most businesses, this involves submitting IRS Form 7004 (or Form 4868 for sole proprietors) by your original due date so you get up to six extra months to submit your tax return. It’s a lifeline for busy entrepreneurs, but don’t confuse it with more time to pay what you owe.
Business Tax Filing Extensions: What They Do and Don’t Do Read More »
Acquiring a business is just the beginning. The real challenge starts the moment the deal closes.
Without a strategic plan, new owners often hit what’s known as the J-curve: a dip in performance, cash flow, and operational stability before things start to improve. This period is critical, and how you handle it can define the long-term success of your new venture.
To thrive through this transition, you need to focus on three pillars: cash flow management, risk mitigation, and accounting system upgrades.
Post-Acquisition Integration: Your 100 Day Plan Read More »
In a move that’s shaking up the Midwest grocery landscape, Schnuck Markets has officially completed a significant grocery store acquisition by purchasing Festival Foods and Hometown Grocers. The deal brings 51 stores into Schnucks’ network, marking its most aggressive expansion into the Wisconsin market to date. This strategic merger is set to redefine grocery shopping in Wisconsin and signals a powerful play by Schnucks to strengthen its regional presence. With many customers wondering “why?”, here’s the Midwest CPA breakdown of what could be behind this strategic decision, and what it could mean for customers.
Major Grocery Store Acquisition: Schnucks Expands in Wisconsin Read More »
The Allure of the Vending Machine Business
The idea of buying a vending machine business is appealing for one main reason: passive income. With relatively low startup costs and minimal staffing requirements, vending machines look like the perfect business opportunity, especially in an era obsessed with side hustles and financial freedom.
But while this industry does have potential, it’s not as passive or easy as it may seem.
Machine to Money: What to Know Before Buying a Vending Machine Business Read More »
When buying a small business, financial red flags aren’t always obvious. Though commonly overlooked, customer concentration risk is one of the most dangerous red flags. We recently worked on a deal where the seller claimed their largest customer only accounted for 20% of revenue. But after a deeper dive in the quality of earnings (QoE) process, we uncovered that the real figure was over 60%. That discovery ultimately killed the deal.
Customer Concentration Risk: Lessons from a Failed Acquisition Read More »
When it comes to accounting methods, cash basis accounting is often favored by small business owners for its simplicity. Under this approach, revenue is only recognized when cash is received, and expenses are recorded when cash is actually paid. While easy to manage, this method can distort the financial picture by failing to align revenue and expenses with the periods they relate to, resulting in inconsistent, “lumpy” financials.
Cash vs. Accrual: The Importance of Revenue Recognition Read More »
Starting or running a small business means balancing growth, cash flow, and operational priorities. One key partner in that journey is your accountant or CPA.
Perhaps you’re just looking into your small business accounting options, or maybe you’ve already decided to check out our pricing guide to compare it with other options out there, and want to know why different firms charge so differently.
In this post, we’ll walk you through how Midwest CPA determines pricing for monthly accounting services. You’ll learn what drives the costs, what’s included in each of our service tiers, and why our fixed‑fee model offers clarity and consistency for business owners.
What Determines Your Accounting Quote at Midwest CPA? Read More »
Signing a Letter of Intent (LOI) is a big step in acquiring a business. It signals serious intent, begins due diligence, and often involves commitments of time, effort, and money. But being under LOI does not guarantee you should go all the way to closing. Sometimes walking away is the smartest decision you can make. In this article, you’ll discover three critical reasons to walk away before closing so you can avoid buying the wrong company and instead, invest in the right one.
Under LOI? Here’s When Walking Away Is the Smart Move Read More »
