by Amanda O'Brien | Accounting News, News, Newsletter, Retirement, Retirement Savings, Small Business
When it comes to reinvesting in their businesses, small business owners are pros. Buying equipment, hiring employees, and upgrading systems tend to come naturally. But setting money aside for retirement? That often gets put in the “later” category.
Here’s the problem with that approach: there’s no HR team enrolling you in a plan, and there’s no employer match unless you create one yourself. You need to be intentional about building a retirement plan. Here are some strategies to help you build retirement savings while reducing your tax burden.
Start with a 401(k)
A traditional 401(k) is a good starting point because it allows you to contribute a portion of your income before taxes, which lowers your current taxable income. And what makes it particularly enticing for small business owners is the ability to contribute as both the employee and employer. That means higher total contributions compared to other retirement accounts. These plans come with rules, nondiscrimination testing, and reporting requirements, so the setup is a little more complex, but the savings potential makes it worth your time and attention.
Consider a Roth 401(k) for Future Flexibility
A Roth 401(k) works differently than a traditional 401(k). You pay taxes on contributions now, but withdrawals later are tax-free. This can be useful if you expect to earn more in the future, or if you expect taxes to increase.
Many business owners contribute to both a traditional and Roth 401(k) so they’re not relying on one tax outcome.
SEP-IRA Offers Simplicity
The SEP-IRA is simple to open, easy to maintain, and has no annual filing requirements. Business owners can contribute up to 25% of your net income each year, and contributions can be made up until your tax filing deadline. This is helpful if your income varies.
If you have employees, you’ll have to contribute the same percentage for them as you do yourself, so keep this in mind as your team grows. But for solo entrepreneurs and smaller operations, this is a solid choice.
Solo 401(k): Flexibility for Owner-Only Businesses
If you don’t have employees (other than a spouse), the Solo 401(k) is worth looking into. Like a traditional 401(k), you can contribute as both employee and employer. That often allows you to save more compared to a SEP-IRA at similar income levels.
Many plans also offer Roth IRA contributions and loans against the account if you ever need extra funds, offering both flexibility and control.
Think About Combining Strategies
In most cases, using more than one strategy makes the most sense for small business owners, particularly if you have multiple income streams. For example, you might contribute to a 401(k) through your main business and use another plan for side income.
Making multiple strategies work together comes down to knowing how the plans fit together and staying within contribution limits. The rules can get complicated, so working with a professional can help you navigate the best setup, avoid mistakes, and modify your plan as your business grows or your income changes.
by Amanda O'Brien | Accounting News, Financial goals, News, Newsletter, Retirement Savings
Key Takeaways
- Not coordinating 401(k)s can cost couples real money. Research suggests couples who don’t prioritize the highest employer match may lose an average of $14,000 in retirement wealth over their lifetime — not from saving too little, but from saving in the wrong order.
- Always prioritize the plan with the best employer match first. If one spouse’s employer offers a 100% match on the first 4% of contributions and the other offers 50% on 6%, contribute enough to capture the full match from the more generous plan before directing funds elsewhere.
- Regular “money dates” keep both spouses aligned. Scheduling brief, recurring financial check-ins — twice a year or quarterly — ensures couples catch changes like a new job with a better match and can adjust contributions before leaving money on the table.
When couples talk about retirement savings, they often overlook an important detail: how their two retirement plans work together. That small oversight can leave money on the table. Here’s how to coordinate 401(k) plans for the biggest impact.
What the Research Shows About Coordinating 401(k)s and Retirement Savings
Research shows that couples who don’t coordinate retirement contributions may miss out on valuable employer matching contributions. Over time, that missed opportunity can add up. Some estimates suggest couples who don’t prioritize the highest company match lose an average of about $14,000 in retirement wealth over their lifetime.
This isn’t a case of saving too little. It’s a case of not saving in the most strategic way.
Why the Employer Match Matters
An employer matching contribution is a powerful benefit in a workplace retirement plan. Many employers match a percentage of what workers contribute to their 401(k). For example, a company could match 50% on the first 6% of salary, or 100% on the first 3 or 4%.
This is essentially free money straight into your retirement account.
But when both spouses have access to company-sponsored 401(k)s, there are things to be aware of. One employer might offer a higher match than the other. Or one plan might match contributions sooner or at a higher percentage.
If couples treat their savings separately and don’t coordinate, they might just spread contributions evenly between the two plans. That sounds logical, but it might not be the smartest financial move.
In many cases, it makes more sense to prioritize contributions to the account with the highest employer match first.
For example, if one spouse’s employer matches 100% of the first 4% of contributions while the other matches the first 50% of 6%, it usually makes sense to contribute enough to the first plan to realize the full 100% match. Once that match is fully realized, additional contributions can go to the other plan.
This simple shift can increase retirement savings without requiring the need to save more money.
The Value of Money Conversations
The problem couples often run into isn’t math. It’s communication. And miscommunication can create gaps.
For example, one spouse may not contribute enough to receive the full employer match, while the other spouse contributes more than necessary to their plan with a smaller match.
When each spouse operates somewhat independently, and they don’t look at the bigger picture together, they can miss out on money.
The Power of Money Dates
The solution to this miscommunication is simple: talk about money more often. Try setting regular “money dates,” where you both schedule times to sit down and review your finances together. This can be done twice a year or once a quarter – whatever fits your specific circumstances. And it doesn’t need to be complicated. Even just a few minutes catching up on financial goals can ensure that you’re both on the same page.
These conversations can include topics like:
- Retirement contributions
- Employer match rules
- Changes in salary or benefits
- Debt payoff plans
- Upcoming financial goals
For example, if one spouse changes jobs and receives a better 401(k) match, a smart strategy would be to shift more contributions to that account.
Retirement planning isn’t just about how much you save. It’s also about how you save. And one simple question that isn’t always asked: Which 401(k) gives us the best match?
by Amanda O'Brien | Accounting News, IRS, News, Newsletter, Tax, Tax Planning, Tax Planning - Individual
If you owe back taxes and you’re expecting a refund this year, you might be wondering if the IRS will keep it.
In some cases, yes. In others, no. Whether the refund reaches your bank account depends on several factors.
If you have unpaid federal tax debt, the IRS can apply your current refund to that balance before sending you any money. And in some situations, your refund can also be applied to other debts, such as student loans or child support.
When the IRS Keeps Your Refund
If you owe federal taxes from a previous year, the IRS will usually apply any refund to that outstanding balance automatically (even if you have an installment agreement with the IRS for those back taxes). You should receive a notice explaining how much of your refund was applied to your debt and how much remains owed.
Treasury Offset Program
The Treasury Offset program allows the federal government to take your tax refund to pay off certain debts. Back taxes are at the top of that list.
Other debts include:
- Past-due federal student loans
- Unpaid child support
- State income tax debt
- Certain unemployment compensation debts
If your refund is taken through the Treasury Offset Program, you will receive a written notice detailing the original amount, the amount taken, and the agency that received the payment.
If you believe the offset was made in error, contact the agency that received the payment, not the IRS.
What Happens If Your Refund Doesn’t Cover What You Owe?
If your refund doesn’t fully cover your tax debt, the IRS will take the entire amount and apply it to your balance, even if you’ve been making on-time payments to a payment installment agreement. And interest and penalties will continue to accrue.
Options When Owing Back Taxes
Owing back taxes to the federal government feels overwhelming, but there are options available. The key is taking action instead of avoiding the issue. These options include:
- Installment agreement: This agreement allows you to pay off your debt over time in monthly payments. Taxpayers can usually set this up online themselves, and it’s the simplest solution if you can afford monthly payments.
- Currently Not Collectible (CNC) status: This is an option for taxpayers facing significant financial hardship. This agreement allows you to pay off your debt over time in monthly payments. Taxpayers can usually set this up online themselves, and it’s the simplest solution if you can afford monthly payments.
- Offer in Compromise: This option allows you to settle your tax debt for less than you owe. The IRS does not approve these easily. You need to prove you can’t pay the full amount owed, and you likely won’t be able to, so accepting less than the full amount is actually in the IRS’s best interest. You’ll need to prove hardship or that there’s real doubt about the amount owed.
Adjust Your Withholding Going Forward
Once you’ve dealt with your back taxes, think about adjusting your paycheck withholding. Submitting a new W-4 form to your employer can help prevent underpayment in future years.
Don’t Wait for the IRS to Act
The worst thing you can do when you owe back taxes is nothing. The debt isn’t going to disappear, and the penalties will keep piling up. The sooner you address it, the more options you’ll have. Your refund might be gone this year, but dealing with the problem now prevents a bigger mess down the road.
by Amanda O'Brien | Accounting News, News, Newsletter
Health savings accounts (HSAs) are one of the best tools for saving on healthcare costs. And beginning this year, more Americans than ever will qualify for HSAs, thanks to the One Big Beautiful Bill (OBBB), which was passed last July. Read on to learn what’s changing, who qualifies, and how these updates could offer savings on healthcare costs.
What Is an HSA?
An HSA is a special type of savings account Americans can use to pay for qualified medical expenses. Contributions are tax-deductible, the money grows tax-free, and withdrawals are tax-free for qualified medical expenses. Unlike flexible spending accounts (FSAs), HSAs don’t have a “use it or lose it” rule, so your funds roll over each year. And you keep the account even if you change jobs or retire. Until now, HSAs have been available only to people enrolled in high-deductible health plans (HDHPs), but the OBBB changed that.
Bronze and Catastrophic ACA Health Plans Now Qualify
As of January 1, 2026, anyone enrolled in a bronze or catastrophic health plan sold through the Affordable Care Act (ACA) marketplace now qualifies for an HSA plan. Before, these plans didn’t meet the IRS’s strict HDHP requirements. This update opens the door for millions more people, especially younger adults and people who choose lower-premium coverage, to start saving for healthcare expenses.
Direct Primary Care Now Covered
Under the OBBB, people using Direct Primary Care (DPC) can now pair it with an HSA. DPC is a subscription model where patients pay a monthly fee to a doctor or practice for unlimited primary care visits. Now, as long as the fee stays under $150 per month for individuals (under $300 for families), HSA funds can be used to pay for those services. This gives patients more flexibility and control over their healthcare budgets.
Telehealth Services No Longer Disqualify Patients for HSA Eligibility
In the past, if a patient’s HDHP covered telehealth visits before they met the deductible, it could wipe out their HSA eligibility for the year. However, the OBBB allows HDHPs to cover telehealth visits before the deductible is met. That means a patient’s health plan can cover virtual doctor visits upfront (or with a small copay), and they can still contribute to their HSA. Patients are no longer forced to choose between the convenience of telehealth and their savings goals.
These updates make HSAs more accessible, especially at a time when healthcare costs are on the rise, and more patients are using telemedicine. An HSA can build a cushion for future costs, making it an often overlooked retirement savings vehicle.
by Amanda O'Brien | Accounting News, Business Growth, News, Newsletter, Small Business
When it comes to increasing the value of a small business, focusing on top-line growth won’t give you the whole picture. Revenue alone doesn’t always equal value, and a bigger business isn’t always a better one. If your long-term goal is to build a valuable business with options for your eventual exit plan, here’s what you need to know.
Focus on Fundamentals
Growth looks good on paper, but without the right foundation, a business isn’t actually valuable. What truly builds value is a combination of profitability, liquidity, and operational efficiency.
- Profitability: You’re earning real income after expenses – proof that your business model actually works. High revenue with razor-thin margins won’t attract serious buyers.
- Liquidity: You have cash on hand to meet obligations and weather storms. Strong liquidity shows potential buyers and lenders that your business can handle surprises. It also gives you flexibility to invest in growth opportunities.
- Efficiency: You’re using your people, systems, and resources well. If your team is constantly putting out fires or if you’re stuck doing everything yourself, your business isn’t running efficiently. Inefficiency cuts into profits, increases burnout, and lowers the value of your business.
Together, these create a business that’s financially healthy and attractive to potential buyers.
Know Your Margins
To increase your business’s value, you need to know your true margins. Not just on the macro level. You should be tracking each project, service, or product. And it’s not enough to know your numbers in isolation. How do they compare to industry benchmarks? Potential buyers will want to know how your margins compare to competitors. This gives you negotiating power when it’s time to sell.
Build a Business That Can Run Without You
One of the biggest red flags for buyers is a business that falls apart when the owner steps away. If everything depends on your decisions and your moves, the business isn’t really transferable. To increase value, build a team you trust, define roles clearly, document your processes, and establish systems for day-to-day operations.
Keep Clean Books
Potential buyers want transparency, so be prepared to show accurate and current financials. If you want to sell someday, or even just know your business’s true value, you’ll need:
- Three years of clean financial statements
- Properly categorized income and expenses
- Clean records – no blending of personal and business transactions
Good accounting isn’t just about taxes. Messy books create doubt. This can weaken your negotiating power and ultimately lower your sale price.
Think Like a Buyer, Plan Like a Seller
It might seem counterintuitive, especially for startups and young companies, but the most valuable businesses are built with an exit strategy in mind. The choices you make now should move you toward a profitable and transferable company. Whether you decide to sell, step back, or pass on, focusing on strong fundamentals creates real value and sets you up for a better future.
