$14,000 tax Credit Per Employee. Don’t miss it!

New legislation means new benefits for agency owners! Under the Consolidated Appropriations Act passed in December, you’re now eligible for both PPP loan money AND tax credits for employees. Here’s everything you need to know about the Employee Retention Tax Credit (ERC) and what it means for you. What is the Employee Retention Tax Credit (ERC)? The Employee Retention Tax Credit is a refundable tax credit (up to $7,000 per employee per…  Read more

New 1099 Form for 2021

The craziness of 2020 isn’t over, despite the date change on the calendar. There’s a new 1099 form for contractors you paid in 2020. Here’s what you need to know. Any person or company to whom you paid at least $600 for services in 2020 should receive a 1099.  This includes all individuals, partnerships, Limited Liability Companies (LLC), or Limited Partnerships (LP) to whom you paid $600 or more over…  Read more

New PPP Loans and Tax Credit are on Their Way

You’ve probably heard the news that a new PPP package was passed this week. Here are the highlights: PPP income is NOT Taxable. And purchases made with the funds are eligible for deductions. New PPP loans are on the way. There is a new tax credit in place. PPP is not taxable The biggest news of all. After the PPP 1.0 rollout, guidance was lacking and there was confusion over whether or not purchases made…  Read more

5 Tax-Cutting Strategies to Implement in Before the Year-End

With just 2 weeks left in 2020, now is the time to act if you want to save on your taxes.  If you’re like most agency owners, you’re not making the best decisions for your business taxes: You’re not optimizing owner pay You’re set up in the wrong entity structure You’re leaving deductions on the floor Or worse, you don’t have a tax plan at all. You’re trusting your CPA…  Read more

Is My PPP Income Going to Be Taxed?

Unfortunately, there’s not a straightforward answer, yet. Within the CARES Act, Congress says that PPP recipients whose loans are forgiven are not required to treat the income as taxable. But the IRS says that expenses paid with PPP funds are not deductible. While not requiring you to pay income tax directly on the PPP money, this is a roundabout way of making sure you will pay taxes on it. Wiping…  Read more

Tax Impact – Remote Employees in New States

Decentralized work is booming. Employees can work from all over the country. At the same time, it’s creating a web of compliance complexity for agencies. “What do I do if I have a remote employee working from a new state?” Rule of thumb – follow the “physical presence” rule. This states you are required to withhold employee taxes in the state where the work is performed. An example: HQ is…  Read more

Building a Financial Reporting Rhythm

Do your financial reports have too much going on? All of the information is there, but picking out what matters is near impossible. What does the reporting that you send to your clients look like? It’s clear, simple and actionable. It shows them ROI, handpicked performance metrics and how that relates to targets. I also know there is A LOT of information that doesn’t make it onto this reporting. Why…  Read more

Tax Free Home Office Reimbursement

You’ve likely been handling some work from home. But are you capturing the tax benefits? The home office tax deduction provides serious tax savings to agency owners. Turning otherwise nondeductible personal expenses into big business deductions. But remember, the Tax Cuts and Jobs Act has eliminated deducting these as itemized deductions. Luckily, there is The Accountable Plan. The Accountable Plan When your agency reimburses you through an accountable plan, the payment…  Read more

“All in” what employees cost – Burdened Comp

Payroll is the life blood of running an agency, but there’s more to payroll than salary. You pay taxes, health insurance, benefits, worker’s compensation insurance – the hidden costs of payroll. You know your team’s billable rates, but what about the true all in cost of employment by the hour? Unburdened Comp Unburdened comp is simply salary. It’s easy to figure out and is what most agencies use to price clients. Agency…  Read more

Create an advisory board for your agency

Many remarkable entrepreneurs, including Warren Buffet, Sheryl Sandberg, and Richard Branson, have credited their success, in part, to the advice of their mentors. An advisory board is an informal group of mentors whose collective business expertise—and objectivity—can help you make better, more informed decisions, thereby accelerating growth. Unlike business consultants (whose fees may well exceed your budget), advisory board members may agree to provide advice pro bono, for a small…  Read more

Bookkeeping Basics for Agency Owners

On average, agency owners spend 10 hours each week recording, organizing, and processing financial transactions – everything from accounts receivable and payable, to employee payments, expense receipts and supplier invoices. While the process may be time-consuming (and tedious!), effective bookkeeping is the foundation of sound financial management – which in turn, is the lifeblood of your agency. Feeling overwhelmed by mountains of paperwork and complex calculations? Here are three bookkeeping…  Read more

Polite ways to fire a client

Ask anyone who’s been self-employed for a few years. By and large, the vast majority of clients are great. The less than ideal ones, however, can become a serious liability. Problem clients come in all shapes and sizes. There are the late payers and scheduled “no shows”. The ones who are demanding and don’t respect your time. Remember, just because you need to earn a profit doesn’t mean it’s in…  Read more

Predict with Cashflow Forecasts

Managing cash flow is a vital part of running a successful agency. Some agency owners think managing cash flow simply means keeping track of how much money enters and leaves the firm, but there’s actually more that goes into it. Cash flow forecasting, for example, is an incredibly valuable tool that helps you anticipate cash flow issues, plan for days when your cash flow is limited, and show the bank…  Read more

CARES ACT – Paycheck Protection Program

The most important part of the CARES Act that will apply to your business is the Paycheck Protection Program (section 1102 p. 9)​ What is it? It’s a forgivable loan (basically a grant) for you to retain employees. Businesses with less than 500 employees are eligible for this. It’s designed to cover payroll and overhead costs for eight weeks. How much? The maximum amount is up to 2.5x of an employer’s average…  Read more

Families First Coronavirus Response Act

Two Components: The Emergency Paid Leave Act (EPLA) The Emergency Expansion of Family Medical Leave (EFMLA) #1 – EPLA The employee must not be able to work at all (remotely or on-site) due to any of the following: The employee is subject to any federal, state, or local quarantine A health care provide advised the employee to self-quarantine The employee has symptoms of the virus The employee is caring for…  Read more

Coronavirus Response Act and how it impacts you

This week the Coronavirus Response Act will be signed into legislation. Establishing paid leave for employees and offsetting tax credits to employers. What it does Employers will be required to pay their employees affected by the coronavirus. Either through illness or quarantine related measures. The government will be offsetting this cost through payroll tax credit or refund. The Details Employees of companies with less than 500 employees can take up…  Read more

What Cashflow Lever is your Agency Pulling?

Know your Numbers Cold Now more than ever you need to know how cash in moving in and out of your agency. What is your monthly burn rate? How many days of cash do you have on hand? What’s that number if revenue cuts in half? …..what if it goes to zero? Why is is so important? No your revenue won’t go to zero, but knowing your runway in a…  Read more

Are You Habit Stacking Your Tax Payments?

Taxes are a pain, but there’s no way to avoid them, right? We try all the time to research every possible deduction and get all the wonderful benefits of being a business owner, but at the end of every year, we’re still stuck paying an arm and a leg, sometimes with penalties and interest as well.  What can we do to get ourselves out of this vicious cycle? One great…  Read more

Is your Agency Leveraging the QBI Deduction?

If you operate your agency as a pass-through entity, (proprietorship, partnership, or S-corporation), the profits of that business can generate you a big Section 199A tax deduction. Agency – No-Problem Businesses You qualify for the Section 199A deduction, regardless of pass-through business type—when you have Pass-through qualified business income (QBI), and  2019 Form 1040 taxable income equal to or less than $160,700 (single / head of household) or $321,400 (married,…  Read more

How Much Capital Does Your Agency Need?

Running a digital marketing agency requires you to have money on hand to make more of it. While bringing in new and retaining old clients sounds like the best fix, it takes a little more managerial flex than that. Remember, cash is king. You need it to operate and grow your agency now and in the future. Let’s start by examining the root of capital needs: working cash flow. It’s…  Read more

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