Individuals – Key Points From OBBB

□  Increased Standard Deduction: The standard deduction has been increased for 2025 and beyond. For 2025, the amounts are $31,500 for joint filers and surviving spouses, $23,625 for heads of household, and $15,750 for singles and marrieds filing separately. These amounts will be adjusted for inflation after 2025. Because these higher amounts mean fewer taxpayers will benefit from itemizing, consider bunching itemized deductions into a single year to exceed the standard deduction, then take the standard deduction in alternate years.

□  Individual SALT Limitation: The state and local tax (SALT) deduction cap is temporarily increased to $40,000 for 2025 ($40,400 in 2026, with 1% annual increases through 2029), before reverting to $10,000 in 2030. For those with MAGI above $500,000 in 2025, the deduction phases out by 30% of the excess over the threshold, but will not drop below $10,000. Managing income and deductions to stay below the phaseout threshold, or timing large transactions to occur in years with a higher cap, can help maximize your tax benefit during this limited window.

□  Individuals' Charitable Deductions (Non-Itemizers): Beginning in 2026, taxpayers who take the standard deduction can claim an "above-the-line" deduction for cash contributions of up to $1,000 for single filers and $2,000 for married couples filing jointly. This deduction applies only to direct cash gifts to qualified public charities, not to donor-advised funds (DAFs) or private foundations. You should retain record of every charitable donation they make. For non-itemizers, it would be beneficial to delay charitable contributions until 2026 as this “above the line” deduction will not be available on 2025 tax returns.

□  Individuals' Charitable Deductions (Itemizers): Beginning in 2026, for taxpayers who itemize deductions, only the amount of their total charitable contributions that exceeds 0.5% of their AGI will be deductible. For example, a taxpayer with a $200,000 AGI could only deduct contributions above $1,000 (0.5% of $200,000). To minimize the impact of the .5% floor, consider expediting charitable contributions to be made before December 31, 2025 or “bunching” future donations in alternating years. Utilizing a donor-advised fund (DAF) is an effective way to donate larger amounts and taking a deduction in one year, but allowing amounts to be donated to qualified charities over time. Additionally, if you are age 70½ or older, you can circumvent the .5% floor by utilizing a Qualified Charitable Deduction (QCD) if you donate to a charity directly from your IRA.

□  Wagering Losses: Starting in 2026, only 90% of your wagering losses can be deducted against your winnings, even if your losses equal or exceed your winnings. You should keep in mind when gambling that at least 10% of your winnings will be taxable each year, regardless of how much you lose.

□  Car Loan Interest Deduction: For tax years 2025–2028, individuals can deduct up to $10,000 per year in interest paid on loans for new personal-use vehicles even if you don't itemize deductions. The deduction phases out for single filers with MAGI over $100,000 and joint filers over $200,000. To qualify, the loan must be for a new, U.S.-assembled car, SUV, van, pickup, or motorcycle (under 14,000 pounds), secured by a first lien, with the taxpayer as the original owner, and the vehicle's VIN reported on the tax return. If you're planning to buy a new vehicle, consider timing your purchase and loan to maximize deductible interest within the eligible years, and manage your income to stay below the phase-out thresholds for the largest benefit.

□  Miscellaneous Itemized Deductions; Educator Expenses: The Act permanently eliminates miscellaneous itemized deductions for individual taxpayers. Thus, formerly deductible items such as unreimbursed employee business expenses, investment expenses, and tax determination expenses are permanently disallowed. However, starting in 2026, the Act adds a new educator expense deduction that will allow K–12 teachers, counselors, coaches, and aides who work at least 900 hours per year to deduct unreimbursed classroom expenses, such as books, supplies, and equipment. This new deduction won't be classified as a miscellaneous itemized deduction.

□  Casualty Loss Deduction: The rule that limits the casualty loss deduction to losses from disasters has been made permanent. However, starting in 2026, losses from certain state-declared disasters, as well as from federally-declared disasters, will be deductible. A separate Act provision extends the rule that allows an individual's standard deduction to be increased by the individual's net disaster loss. This rule now applies to disasters occurring up to July 4, 2025, the date of enactment of the Act. These losses will be deductible for taxpayers who do not itemize. If you experience a loss due to a qualifying disaster, be sure to document your losses and insurance claims, and consider filing an amended return if you missed claiming a qualified loss in a prior year

□  Pease Limitation: The Pease limitation, which reduced overall itemized deductions for high earners, is permanently repealed. Instead, starting in 2026, high-income taxpayers will see a much smaller 2/37 reduction apply to the lesser of their itemized deductions or the amount by which their taxable income exceeds the 37% tax bracket threshold. With this change, bunching deductible expenses into a single year can be effective, since the reduction is generally less severe than under the old Pease rules.

□  Credit for Contributions to Scholarship-Granting Organizations: For tax years ending after Dec. 31, 2026, individual taxpayers can claim a new income tax credit of up to $1,700 per year for cash contributions to qualifying scholarship-granting organizations (SGOs) in participating states. To maximize this benefit, confirm your state's participation and ensure the SGO is on the IRS-approved list before contributing.

□  Deduction for Taxpayers Age 65 or Older: For tax years 2025–2028, individuals age 65 or older can claim a new $6,000 senior deduction. The deduction is available to both itemizers and non-itemizers. Married taxpayers must file a joint return to claim this deduction. Both spouses on a joint return can claim the deduction if they qualify. The deduction is reduced by 6% of any excess of the taxpayer's modified adjusted gross income (MAGI) above $75,000 (single) or $150,000 (joint). To maximize this benefit, seniors should aim to keep their MAGI below those amounts. Be sure to include the correct SSN for each qualifying individual to avoid disallowance of the deduction.

□  Child Tax Credit: The child tax credit (CTC) has been made permanent and increased to $2,200 per qualifying child for 2025. This amount will be adjusted for inflation after 2025. However, no credit is allowed unless the taxpayer includes a social security number (SSN) for both the qualifying child and the taxpayer (or for at least one spouse in the case of a joint return).

□  Child and Dependent Care Credit: The child and dependent care credit will become more valuable for many families starting in 2026. The maximum credit rate will increase to 50% of eligible expenses, up to $3,000 for one qualifying individual or $6,000 for two or more. The full 50% rate will apply to families with adjusted gross income (AGI) up to $15,000 and gradually phase down to 35% for AGI up to $75,000 ($150,000 for joint filers). The credit rate is further phased down to 20% for AGI up to $105,000 ($210,000 for joint filers). To maximize your benefit, keep thorough records of all qualifying expenses and coordinate with any employer-provided dependent care benefits to avoid missing out on the full credit potential.

□  Adoption Credit: Starting in 2025, the adoption credit is enhanced to include a refundable portion of up to $5,000 per child (indexed for inflation). This means eligible taxpayers can receive up to $5,000 as a refund even if they owe no tax, making the credit more valuable for lower-income families. To maximize this benefit, keep detailed records of all qualified adoption expenses, ensure you have a taxpayer identification number for the child, and file Form 8839 in the year the adoption is finalized.

□  New Tax-Deferred Investment Accounts for Children: Taxpayers can open a new tax-deferred investment account for children, called a “Trump account,” for each eligible child. Taxpayers can contribute up to $5,000 per year in after-tax dollars for each child. Funds must be invested in a diversified U.S. equity index fund. For children born between Jan. 1, 2025, and Dec. 31, 2028, the federal government will automatically contribute $1,000 to each account. Taxpayers should open the account before their child turns 18 to maximize contributions and secure the government benefit if eligible.

□  K–12 Expenses for 529 Accounts: Changes to 529 savings plans allow families to use tax-free distributions for a much broader range of K–12 education expenses, including not just tuition, but also curriculum, books, online materials, tutoring, standardized test fees, dual enrollment, and educational therapies for students with disabilities. Starting in 2026, the annual limit for K–12 distributions doubles from $10,000 to $20,000 per beneficiary. To maximize tax savings, consider timing 529 withdrawals to match qualified expenses within the same tax year, and coordinate with other education tax credits to avoid overlap.

□  Postsecondary Expenses for 529 Accounts: 529 plan distributions can now be used tax-free for a wider range of education expenses, including not only college costs but also “qualified postsecondary credentialing expenses.” This means you can use 529 funds for tuition, fees, books, supplies, and equipment required for enrollment in recognized certificate, licensing, or apprenticeship programs even if they are not traditional degree programs.

□  Alternative Minimum Tax Exemption Amounts: The alternative minimum tax (AMT) exemption amounts are permanently increased for 2026 and beyond, but the phaseout rate for higher-income taxpayers doubles from 25% to 50%. You should review their AMT exposure and consider strategies such as timing income or exercising options in lower-income years to avoid unexpected AMT liability.

□  Energy Efficient Home Improvement Credit: The energy efficient home improvement credit under Code Sec. 25C is terminated for property placed in service after 2025. This applies to qualified improvements such as windows, insulation, and central A/C systems. If you are considering such improvements, it might be beneficial to expedite installation prior to December 31, 2025.

□  Residential Clean energy credit: The residential clean energy expenditures credit is terminated for any expenditures made after 2025. This applies to qualified property such as solar panels, solar water heaters, wind turbines, and geothermal heat pump. If you are considering such improvements, it might be beneficial to expedite installation prior to December 31, 2025.

□  Clean vehicle credits: The credits for new and previously owned clean vehicles terminate for vehicles acquired after September 30, 2025. The credit for qualified commercial clean vehicles also terminates for vehicles acquired after September 30, 2025.

Individuals - Year-End Tax Planning

□  Capital Gains and Losses: Long-term capital gain from sales of assets held for over one year is taxed at 0%, 15% or 20%, depending on the taxpayer's taxable income. If you hold long-term appreciated-in-value assets, consider selling enough of them to generate long-term capital gains that can be sheltered by the 0% rate. The 0% rate generally applies to the excess of long-term capital gain over any short-term capital loss to the extent that, when added to regular taxable income, it is not more than the maximum zero rate amount (e.g., $96,700 for a married couple for 2025). If the 0% rate applies to long-term capital gains you took earlier this year for example, you are a joint filer who made a profit of $5,000 on the sale of stock held for more than one year and your other taxable income for 2025 is $96,700 or less then try not to sell assets yielding a capital loss before year-end, because the first $5,000 of those losses won't yield a benefit this year. (It will offset $5,000 of capital gain that is already tax-free.)

□  Defer Income and Accelerate Deductions: The provisions of OBBB may result in an overall less tax burden for many taxpayers. Postpone income until next year and accelerate deductions into this year if doing so will enable you to claim larger deductions, credits, and other tax breaks for this year that are phased out over varying levels of adjusted gross income (AGI). These include deductible IRA contributions, child tax credits, higher education tax credits, and deductions for student loan interest. Postponing income also is desirable for taxpayers who anticipate being in a lower tax bracket next year due to changed financial circumstances. Note, however, that in some cases, it may pay to actually accelerate income into this year. For example, that may be the case for a person who will have a more favorable filing status this year than next (e.g., head of household versus individual filing status), or who expects to be in a higher tax bracket next year.

□  Roth IRA Conversion: If you believe a Roth IRA is better for you than a traditional IRA, consider converting traditional-IRA money invested in any beaten-down stocks (or mutual funds) into a Roth IRA this year if eligible to do so. Keep in mind that the conversion will increase your income this year, possibly reducing tax breaks subject to phaseout at higher AGI levels. This may be desirable, however, for those potentially subject to higher tax rates under pending legislation.

□  Defer Bonuses: It may be advantageous to try to arrange with your employer to defer, until early next year, a bonus that may be coming your way. This might cut as well as defer your tax. Again, considerations may be different for the highest income individuals.

□  Required Minimum Distributions (RMD): If you were 73 or older this year you must take a required minimum distribution (RMD) from any IRA or 401(k) plan (or other employer-sponsored retirement plan) of which you are a beneficiary. Those who turn 73 this year have until April 1 of next year to take their first RMD but may want to take it by the end of this year to avoid having to double up on RMDs next year.

□  Qualified Charitable Distributions (QCD): If you are age 70½ or older by the end of this year, have traditional IRAs, and especially if you are unable to itemize your deductions, consider making charitable donations via Qualified Charitable Distributions (QCDs) from your IRAs by the end of the year. These distributions are made directly to charities from your IRAs, and the amount of the contribution is neither included in your gross income nor deductible on Schedule A, Form 1040. However, you are still entitled to claim the entire standard deduction. For 2025, distributions of up to $108,000 per taxpayer are tax-free (increasing as a result of inflation adjustment to $111,000 in 2026). The IRA qualified charitable distribution also allows distributions to charities (up to $54,000) through charitable gift annuities, charitable remainder unitrusts, and charitable remainder annuity trusts. Amounts donated via the QCD process are not subject to the .5% floor set by OBBB.

□  Planning For Future QCDs: If you are younger than age 70½ at the end of the year, consider making and maximizing non-deductible contributions to your Traditional IRA. Once you reach age 70½, you can take advantage of the allowable QCD amounts each year.

□  Rollover Distributions: Take an eligible rollover distribution from a qualified retirement plan before the end of the year if you are facing a penalty for underpayment of estimated tax and having your employer increase your withholding is unavailable or won't sufficiently address the problem. Income tax will be withheld from the distribution and will be applied toward the taxes you owe this year. You can then timely roll over the gross amount of the distribution, i.e., the net amount you received plus the amount of withheld tax, to a traditional IRA. No part of the distribution will be includible in this year's income, but the withheld tax will be applied pro rata over the full tax year to reduce previous underpayments of estimated tax.

□  Flexible Spending Account (FSA): Consider increasing the amount you set aside for next year in your employer's FSA if you set aside too little for this year and anticipate similar medical costs next year. If you set aside too much for this year, consider reducing the reducing the amount, as unused funds are forfeited at the end of each year.

□  Health Savings Account (HSA): If you become eligible by December to make Health Savings Account (HSA) contributions, you can make a full year's worth of deductible HSA contributions for the current year. Contributions you make to an HSA outside of your employer can be taken as an “above-the-line” deduction and are not subject to an AGI floor. If you haven’t maximized your allowable HSA contributions for 2025 ($4,300 for self-only coverage, $8,550 for family coverage, an additional $1,000 is allowed for those over 55), consider doing so by April 15^th, 2026. If you must pay a medical bill out-of-pocket, and you haven’t yet maximized your HSA for the year, contributing the amount to your HSA and then paying the bill out of your HSA will allow you the above-the-line deduction that would not be available if the bill was paid by cash.

□  Make gifts sheltered by the annual gift tax exclusion before the end of the year if doing so may save gift and estate taxes. The exclusion applies to gifts of up to $19,000 made in 2025 to each of an unlimited number of individuals. You can't carry over unused exclusions from one year to the next. Such transfers may save family income taxes where income-earning property is given to family members in lower income tax brackets who are not subject to the kiddie tax.

Individuals – Other Considerations at Year-End

□  Review your portfolio – The end of the year is a perfect time to analyze your holdings and determine if the risk tolerances and asset allocations are still appropriate for your investment objectives. Consider your age, health, and family issues. 

□  Review beneficiary designations – Review the beneficiaries named on retirement accounts or insurance policies; consider if assets are titled correctly; determine if a family member should be added as a signer on an account.

□  Wills and Trusts -If you have not set up wills and trusts, then contact your attorney; call us if you need a reference. If it has been many years since you had your wills and trusts drafted, set up a meeting with your attorney or CPA to review the documents, including the named beneficiaries, guardians, and executors.

□  Estate planning – The amount of an individual’s estate that is exempt from estate taxes in 2025 is $13.99 million (double that amount for a married couple). States, like Illinois, may have lower thresholds for the amounts that are subject to state inheritance taxes. Planning is required to make sure that your estate is optimally situated for estate tax purposes. 

□  Grantor (“Living”) trusts – If you have substantial assets, you should consider creating a grantor (also known as living or revocable) trust. If you have a grantor trust, be sure that all assets are held in that trust; brokerage accounts should be titled in the name of the trust.

□  Power of Attorney - As part of the review of wills and trusts, also consider powers-of-attorney and health care powers-of-attorney you have in force (or should have in force) for all of your family members. 

□  Insurance - Review the various types of insurance coverages you have in place and re-examine your needs. This includes homeowner’s, auto, life, health, disability, umbrella liability, and long-term care.   

□  Family meeting – While there may be a few more family gatherings this year compare to last year, many will still be “zooming” their loved ones at the holidays. Whether your family is zooming or in-person, consider having a family meeting to give an overview of your investments and objectives, charitable giving strategies and desires, the location of key documents, and names of your key advisors (CPAs, attorneys, bankers, insurance agents, investment advisors, etc.).

□  Safe deposit box -Make a special point to visit your safe deposit box and inventory (and organize) the contents. Make sure your executor, spouse, or other key person knows where the key is kept.

□  Cyber Security – Many of us have been subject to some level of privacy violations. Consider if you should purchase personal identify theft protection. One good practice is to check once a year with the three major credit bureaus, where you can pull a credit report for free.

□  Passwords – The passwords to your critical accounts (bank, investments, insurance) should be someplace where they are accessible in the event of your illness or death. Your password list should include other accounts as well that are password protected (like phones, internet, email, etc.).

Businesses – Key Points From OBBB

□  Qualified Business Income (QBI) deduction: The Act makes this deduction permanent. It also sets a minimum deduction for active QBI for “applicable taxpayers” at $400; defines an applicable taxpayer as one who’s aggregate QBI for all active qualified trades or businesses for the tax year is at least $1,000; and establishes inflation adjustments for the new minimums starting in post-2026 tax years. Also, the phase-in amounts are increased from $50,000 to $75,000 for single filers and from $100,000 to $150,000 for joint filers.

□  Bonus Depreciation: The Act makes additional first-year (bonus) depreciation for certain qualified property permanent at 100% (under prior law, it was to phase out to zero). This provision is effective for property acquired after Jan. 19, 2025. There is also a new 100% bonus depreciation provision for “qualified production property” (QPP, which is certain non-residential real property used in the manufacturing, production or refining of certain tangible personal property). This QPP provision is effective for property placed in service after July 4, 2025.

□  179 Expensing Limits: For property placed in service after 2024, the Code Sec. 179 expensing limits are increased to $2,500,000 and the phasedown threshold is increased to $4,000,000 (both subject to inflation adjustments). Businesses should consider making expenditures that qualify for the liberalized business property expensing option. Expensing is generally available for most depreciable property (other than buildings) and off-the-shelf computer software. It is also available for interior improvements to a building (but not for its enlargement), elevators or escalators, or the internal structural framework), for roofs, and for HVAC, fire protection, alarm, and security systems.

□  Research and Development Expenditures (R&D): The Act restores favorable tax treatment for domestic research and development (R&D) costs. Taxpayers were previously required to amortize such costs beginning in 2022. For expenditures incurred after 2024, the Act allows for immediate expensing on your tax return, but also offers the option to amortize over 60 months. For expenditures incurred between 2022-2024, taxpayers may elect to accelerate unamortized costs over 1 or 2 years beginning with their 2025 returns. Alternatively, eligible small businesses with average receipts less than $31 million may amend their 2022, 2023, or 2024 returns to immediately expense R&D costs and claim a refund for those years. The election to amend must generally be made by July 6, 2026.

□  Exclusion of gain on the sale or exchange of Qualified Small Business Stock (QSBS): The Act provides that the “applicable percentage” (50% for stock held for 3 years, 75% for stock held for 4 years, and 100% for stock held for 5 years) of gain on the sale or exchange of QSBS may be excluded from gross income for QSBS acquired after July 4, 2025. Also, (i) the per-issuer limitation on eligible gain is increased from $10 million to $15 million, which will now be subject to inflation adjustments, and (ii) the $50 million aggregate gross asset limitation for QSB eligibility is increased to $75 million, which will now be subject to inflation adjustments.

□  Enhanced Manufacturing Investment Credit: The advanced manufacturing investment credit (also known as the semiconductor credit or the CHIPS credit) on qualified investments in an advanced manufacturing facility built before Jan. 1, 2027 is increased to 35% (up from 25%) for property placed in service after 2025.

□  Information Reporting, Form 1099-K: The Act retroactively reverts the Form 1099-K reporting threshold back to the pre-ARPA $20,000 and 200 transactions threshold.

□  Information Reporting, Forms 1099-NEC, 1099-MISC: For payments made after 2025, the reporting thresholds for Forms 1099-NEC and 1099-MISC are increased from $600 to $2,000 (adjusted for inflation after 2026).

□  Gain on the Sale of Certain Farmland Property: For sales or exchanges occurring after July 4, 2025, sellers of qualified farmland property may elect to pay capital gains tax on the sale in four equal annual installments. The first payment is due with the return for the year in which the sale occurs, with the remaining payments being due with the successive years' returns (but if a payment is missed, the balance is due immediately).

□  Corporate Charitable Contributions: The Act imposes a new 1% floor (in addition to the 10% ceiling) on corporate charitable deductions for post-2025 tax years. 

□  Excess Business Losses: The Act makes the Code Sec. 461(l) limit on excess business losses permanent.

□  Energy Efficient Commercial Buildings Deduction: Under the Act, the energy efficient commercial building deduction terminates for the cost of energy efficient commercial building property whose construction begins after June 30, 2026.

Businesses - Year-End Tax Planning

□  Qualified Business Income (QBI) deduction: Taxpayers other than corporations may be entitled to a deduction of up to 20% of their qualified business income. For 2025, if taxable income exceeds $394,600 for a married couple filing jointly, (about half that for others), the deduction may be limited based on whether the taxpayer is engaged in a service-type trade or business (such as law, accounting, health, or consulting), the amount of W-2 wages paid by the business, and/or the unadjusted basis of qualified property (such as machinery and equipment) held by the business. The limitations are phased in; for example, the phase-in applies to joint filers with taxable income up to $100,000 above the threshold, and to other filers with taxable income up to $50,000 above their threshold.

□  Taxpayers may be able to salvage some or all of this deduction, by deferring income or accelerating deductions to keep income under the dollar thresholds (or be subject to a smaller deduction phaseout) for the current year. Depending on their business model, taxpayers also may be able increase the deduction by increasing W-2 wages before year-end. The rules are quite complex, so don't make a move in this area without consulting us.

□  Cash Basis Accounting: More small businesses are able to use the cash (as opposed to accrual) method of accounting than were allowed to do so in earlier years. To qualify as a small business a taxpayer must, among other things, satisfy a gross receipts test, which is satisfied for 2024 if, during a three-year testing period which precedes the current year, average annual gross receipts don't exceed $30 million. Cash method taxpayers may find it a lot easier to shift income, for example by holding off billings till next year or by accelerating expenses, for example, paying bills early or by making certain prepayments. (For 2025, the amount rises to $31 million.)

□  De Minimis Safe Harbor Election: Businesses may be able to take advantage of the de minimis safe harbor election (also known as the book tax conformity election) to expense the costs of lower-cost assets and materials and supplies, assuming the costs aren't required to be capitalized under the UNICAP rules. To qualify for the election, the cost of a unit of property can't exceed $5,000 if the taxpayer has an applicable financial statement (AFS, e.g., a certified audited financial statement along with an independent CPA's report). If there's no AFS, the cost of a unit of property can't exceed $2,500. Where the UNICAP rules aren't an issue, consider purchasing qualifying items before the end of the year.

□  Corporate Estimated Tax Payments: A corporation (other than a large corporation) that anticipates a small net operating loss (NOL) for the current year (and substantial net income next year) may find it worthwhile to accelerate just enough of next year's income (or to defer just enough of its current-year deductions) to create a small amount of net income in the current year. This allows the corporation to base next year's estimated tax installments on the relatively small amount of income shown on its current-year return, rather than having to pay estimated taxes based on 100% of its much larger taxable income for next year.

□  Bonus Deferral: Year-end bonuses can be timed for maximum tax effect by both cash- and accrual-basis employers. Cash basis employers deduct bonuses in the year paid, so they can time the payment for maximum tax effect. Accrual-basis employers deduct bonuses in the accrual year, when all events related to them are established with reasonable certainty. However, the bonus must be paid within two months after the end of the employer's tax year for the deduction to be allowed in the earlier accrual year. Accrual employers looking to defer deductions to a higher-taxed future year should consider changing their bonus plans before year end to set the payment date later than the 2.5-month window or change the bonus plans terms to make the bonus amount not determinable at year end.

□  Debt Cancellation Income: To reduce current-year taxable income, consider deferring a debt-cancellation event until next year.

□  Passive Activity Losses (PALs): Sometimes the disposition of a passive activity can be timed to make best use of its freed-up suspended losses. Where reduction of current-year income is desired, consider disposing of a passive activity before year-end to take the suspended losses against current income.



Businesses – Other Considerations  

□  Corporate records – Update annual resolutions and officer elections.

□  Good standing – Verify that the annual franchise tax return has been filed with the State of incorporation or organization.

□  Insurance – Consult with your advisors, executive team, and insurance agent to determine if your business, property, and key officers, are adequately insured. 

□  Buy-sell agreement – If your business has multiple shareholders, consider adopting an agreement to orderly transfer those shares in the event of a sale, retirement, or death.

□  Budget – Every business should have a budget or a forecast in place. Assemble your trusted team, pull the data together, study the most recent results, consider objectives for the coming year, and create the budget or forecast.

□  Benefits – Many businesses would benefit by checking their benefit package annually, to be sure that it is competitive with the marketplace. This includes retirement accounts offered, insurance options, as well as “soft” benefits like remote work and flex-time.

□  Compensation – Consider if the level of pay of your current employees is competitive. In today’s competitive environment, it is often much easier to retain a key employee than recruit one.

□  Cyber Security – It seems that a day rarely goes by without a story about a business being hacked. Cyber security should rank at the top of everyone’s list. Discuss weaknesses in your server, systems, or procedures with internal staff and with experts in the field. There are some good 3^rd parties that can be engaged to test your systems and people.

□  Other Security – Consider other ways your business could be exposed to risk. For instance, is your building secured with proper alarms, cameras, etc.

□  Entity type – Even though making a change is not likely, sit down with your attorney and CPA to discuss entity type; maybe your business would benefit by considering a different structure. Limited liability companies have grown in popularity, but there is also a place for S corporations, and C corporations may still offer some advantages.

□  Ownership structure – There may be a number of reasons to consider the ownership of a business, including the need to reward and retain key employees, to gain income tax or estate tax advantages. 

□  Acquisitions – Expanding in the marketplace may offer strategic advantages to a business, whether to open up new markets, access new customers, or gain skill sets. Identifying key targets may be something to consider in the new year, if it fits with the goals of ownership.