Bradley DeVries to Lead Yeo & Yeo’s Nonprofit Services Group

Yeo & Yeo is pleased to announce that Bradley DeVries, CPA, CAE, will lead the firm’s Nonprofit Services Group, which provides accounting, audit, and consulting solutions for nonprofit organizations across Michigan.

DeVries has nearly two decades of experience in public accounting, with an emphasis on serving nonprofit and association clients as well as multifamily businesses. He specializes in single audits and internal control design, and serves as the managing principal of the Lansing office.

“I understand the pressures nonprofit leaders face, from board expectations to compliance and sustainability,” DeVries said. “My goal is that our nonprofit team members can continue to be trusted partners who help clients solve problems with confidence and serve their communities effectively.”

DeVries began his career as an internal auditor for the State of Michigan before joining Yeo & Yeo in 2005. Since then, he has developed a strong reputation for guiding nonprofit leaders through financial and governance complexities. In addition to the Certified Public Accountant (CPA) designation, he holds the Certified Association Executive (CAE) designation, demonstrating his dedication to professional development in nonprofit and association management.

DeVries is passionate about education and mentorship. He has led finance and budgeting training sessions for the Michigan Society of Association Executives’ Academy of Association Management and in-house seminars on nonprofit and real estate auditing. In the community, he is a frequent volunteer and serves as a board member for the Michigan Rural Development Council.

“Brad’s deep commitment to the nonprofit sector, combined with his extensive experience and ability to build strong relationships with clients and colleagues, equips him to successfully lead our Nonprofit Services Group,” said Jamie Rivette, CPA, CGFM, Assurance Service Line Leader. “His leadership will undoubtedly help drive meaningful impact and continued growth.”

Yeo & Yeo’s Nonprofit Services Group supports hundreds of nonprofit organizations across Michigan, providing services from independent audits and internal control assessments to outsourced accounting, HR solutions, and financial management consulting. Yeo & Yeo’s professionals leverage the award-winning YeoLean audit process—rooted in Lean Six Sigma principles—to deliver audits that are more efficient and less disruptive. Whether serving as trusted advisors or interim staff, the team’s goal is to empower nonprofit leaders to focus on what matters most: advancing their mission.

Divorce is stressful under any circumstances, but for business owners, the process can be even more complicated. Your business ownership interest is often one of your largest personal assets, and in many cases, part or all of it will be considered marital property. Understanding the tax rules that apply to asset division can help you avoid costly surprises.

Tax-free transfers

Most assets — including cash and business ownership interests — can be divided between spouses without triggering federal income or gift taxes. Under this tax-free transfer rule, the spouse receiving the asset assumes its existing tax basis (used to determine gain or loss) and holding period (short-term or long-term).

Example: If you give your spouse the marital home in exchange for keeping 100% of your company stock, the transfer is tax-free. Both the home and the stock retain their original tax basis and holding period for the new owner.

Tax-free treatment applies to transfers made:

Before the divorce is finalized,
At the time of divorce, and
After divorce, if they occur within one year of the marriage ending or within six years if required under the divorce agreement.

Future tax consequences

While transfers may be tax-free at the time, the recipient will owe taxes if he or she later sells an appreciated asset (where fair market value exceeds the tax basis).

For instance, if your ex-spouse receives 48% of your highly appreciated company stock, no tax is due at transfer. However, when he or she sells the stock, your ex will pay any capital gains tax based on your original basis and holding period.

Important: Appreciated assets come with built-in tax liabilities, which generally makes them less valuable than an equal amount of cash or non-appreciated property. Always account for taxes when negotiating a divorce settlement.

This rule also applies to ordinary-income assets — such as business receivables, inventory or nonqualified stock options. These can be transferred tax-free, but the recipient will report the income and pay taxes when the asset is sold, collected or exercised.

Valuation and adjustments for tax liabilities

A critical step in a divorce involving a business is determining its value. When valuing a business interest for this purpose, the valuator must understand what’s appropriate under applicable state law and legal precedent because the rules and guidance may vary across jurisdictions. The valuation process may be contentious, especially if one spouse is actively involved in the business and the other isn’t (or will no longer be involved after the divorce is settled). A professional valuation considers tangible assets (including equipment, inventory and property), intangible assets (including intellectual property) and other factors.

Potential tax liabilities are also considered during the valuation process. Examples include deferred taxes on appreciated assets, liabilities from unreported income or cash distributions, and implications from goodwill. These adjustments can significantly affect the business interest’s value and the fairness of the settlement agreement.

Nontax issues

There are a number of issues unrelated to taxes that a divorcing business owner should be prepared to address, including:

Cash flow and liquidity. Divorce settlements may require significant cash outlays — for example, to buy out a spouse’s share of the business or to meet alimony and child support obligations. This can strain the business’s liquidity, especially if the owner must take out loans or sell assets to meet these obligations. We can help assess the impact of these financial demands and develop strategies to maintain healthy cash flow, such as restructuring debt or revisiting budgets.
Privacy and confidentiality. Divorce proceedings may expose sensitive business information. Financial statements, client lists and proprietary data may become part of the public record. Business owners should work with legal and financial advisors to protect confidentiality, possibly through protective orders or sealed filings.

Plan ahead to minimize risk

Divorce can create unexpected tax and financial consequences, especially when dividing business interests and retirement accounts (such as 401(k) accounts and IRAs). The financial stakes are often higher for business owners, making careful planning essential.

We can help you navigate these rules and structure your settlement to minimize tax liabilities while complying with state community property laws. The earlier you address potential tax issues, the better your financial outcome after divorce.

Is your organization looking to expand its workforce and having trouble finding workers to fill its needs? If so, you may need to broaden the hiring pool into which you usually cast a line for job candidates.

Since the mid-1990s, the federal government has incentivized employers to consider applicants they might not usually look at through the Work Opportunity Tax Credit (WOTC). However, as of this writing, the tax break’s time is running out. Unless Congress takes action in the next few months, the WOTC will expire on December 31, 2025.

Targeted groups

Generally, an employer may qualify for this credit by paying eligible wages to members of what the IRS describes as “certain targeted groups who have faced significant barriers to employment.” These groups are:

Qualified members of families receiving assistance under the Temporary Assistance for Needy Families program,
Qualified veterans,
Qualified ex-felons,
Designated community residents,
Vocational rehabilitation referrals,
Qualified summer youth employees,
Qualified members of families in the Supplemental Nutritional Assistance Program,
Qualified Supplemental Security Income recipients,
Long-term family assistance recipients, and
Long-term unemployed individuals.

To claim the WOTC, you must first get certification that a new hire is a member of one of the targeted groups. To do so, you need to submit IRS Form 8850, “Pre-Screening Notice and Certification Request for the Work Opportunity Credit,” to your state agency within 28 days of the eligible worker’s first day on the job.

Various requirements

Beyond submitting the form, you must meet various other requirements to qualify for the credit. For example, each eligible employee must complete a specific number of service hours. Also, the credit isn’t available for employees who are related to or previously worked for an employer.

The rules and credit amounts vary depending on the targeted group an employee originates from. For most eligible employees, the maximum credit available for first-year wages is $2,400. However, the credit amount is $4,000 for long-term family assistance recipients, and $4,800, $5,600 or $9,600 for certain veterans. Additionally, for long-term family assistance recipients, there’s a 50% credit for up to $10,000 of second-year wages, resulting in a total maximum credit, over two years, of $9,000.

For summer youth employees, the wages must be paid for services performed during any 90-day period between May 1 and September 15. The maximum WOTC credit available for summer youth employees is $1,200 per employee.

If your organization qualifies for the WOTC, you’ll naturally need to claim it on your federal income tax return. And the credit’s value is limited to your income tax liability. Generally, a current year’s unused WOTC can be carried back one year and then forward 20 years.

Watchful eye

The One Big Beautiful Bill Act, which was signed into law in July, made permanent several tax breaks of interest to many employers. These include the qualified business income deduction and 100% bonus depreciation. Perhaps curiously, it didn’t address the WOTC.

The tax credit’s demise isn’t a sure thing, however. The WOTC has been extended three times since 2015, and Congress might save it again before year end. We can keep you updated on any developments and identify many other tax strategies that may benefit your organization.

The One Big Beautiful Bill Act (OBBBA) shifts the landscape for federal income tax deductions for state and local taxes (SALT), albeit temporarily. If you have high SALT expenses, the changes could significantly reduce your federal income tax liability. But it requires careful planning to maximize the benefits — and avoid potential traps that could increase your effective tax rate.

A little background

Less than a decade ago, eligible SALT expenses were generally 100% deductible on federal income tax returns if an individual itemized deductions. This provided substantial tax savings to many taxpayers in locations with higher income or property tax rates (or higher home values).

Beginning in 2018, the Tax Cuts and Jobs Act (TCJA) put a $10,000 limit on the deduction ($5,000 for married couples filing separately). This SALT cap was scheduled to expire after 2025.

What’s new?

Rather than letting the $10,000 cap expire or immediately making it permanent, Congress included a provision in the OBBBA that temporarily quadruples the limit. Beginning in 2025, taxpayers can deduct up to $40,000 ($20,000 for separate filers), with 1% increases each subsequent year. Then in 2030, the OBBBA reinstates the $10,000 cap.

While the higher limit is in place, it’s reduced for taxpayers with incomes above a certain level. The allowable deduction drops by 30% of the amount by which modified adjusted gross income (MAGI) exceeds a threshold amount. For 2025, the threshold is $500,000; when MAGI reaches $600,000, the previous $10,000 cap applies. (These amounts are halved for separate filers.) The MAGI threshold will also increase 1% each year through 2029.

Deductible SALT expenses include property taxes (for homes, vehicles and boats) and either income tax or sales tax, but not both. If you live in a state without income taxes or opt for the sales tax route for another reason, you don’t have to save all your receipts for the year and manually calculate your sales tax; you can use the IRS Sales Tax Deduction Calculator to determine the amount of sales tax you can claim. (It includes the ability to add actual sales tax paid on certain big-ticket items, such as a vehicle.) The increased SALT cap could lead to major tax savings compared with the $10,000 cap. For example, a single taxpayer in the 35% tax bracket with $40,000 in SALT expenses and MAGI below the threshold amount would save an additional $10,500 [35% × ($40,000 − $10,000)].

The calculation would be different if the taxpayer’s MAGI exceeded the threshold. Let’s say MAGI is $560,000, which is $60,000 over the 2025 threshold. The cap would be reduced by $18,000 (30% × $60,000), leaving a maximum SALT deduction of $22,000 ($40,000 − $18,000). Even reduced, that’s more than twice what would be permitted under the $10,000 cap.

The itemization decision

The SALT deduction is available only to taxpayers who itemize their deductions. The TCJA nearly doubled the standard deduction. As a result of that change and the $10,000 SALT cap, the number of taxpayers who itemize dropped substantially. And, under the OBBBA, the standard deduction is even higher — for 2025, it’s $15,750 for single and separate filers, $23,625 for heads of household filers, and $31,500 for joint filers.

But the higher SALT cap might make it worthwhile for some taxpayers who’ve been claiming the standard deduction post-TCJA to start itemizing again. Consider, for example, a taxpayer who pays high state income tax. If that amount combined with other itemized deductions (generally, certain medical and dental expenses, home mortgage interest, qualified casualty and theft losses, and charitable contributions) exceeds the applicable standard deduction, the taxpayer will save more tax by itemizing.

Beware the “SALT torpedo”

Taxpayers whose MAGI falls between $500,000 and $600,000 and who have large SALT expenses should be aware of what some are calling the “SALT torpedo.” As your income climbs into this range, you don’t just add income. You also lose part of the SALT deduction, increasing your taxable income further.

Let’s say your MAGI is $600,000, you have $40,000 in SALT expenses and you have $35,000 in other itemized deductions. The $100,000 increase in income from $500,000 actually raises your taxable income by $130,000:

At a marginal tax rate of 35%, you’ll pay $45,500 (35% × $130,000) in additional taxes, for an effective tax rate of 45.5%.

In this scenario, even with your SALT deduction reduced to $10,000, you’d benefit from itemizing. But if your $10,000 SALT deduction plus your other itemized deductions didn’t exceed your standard deduction, the standard deduction would save you more tax.

Tax planning tips

Your MAGI plays a large role in the amount of your SALT deduction. If it’s nearing the threshold that would reduce your deduction or already over it, you can take steps to stay out of the danger zone. For example, you could make or increase (up to applicable limits) pre-tax 401(k) plan and Health Savings Account contributions to reduce your MAGI. If you’re self-employed, you may be able to set up or increase contributions to a retirement plan that allows you to make even larger contributions than you could as an employee, which also would reduce your MAGI.

Likewise, you want to avoid moves that increase your MAGI, like Roth IRA conversions, nonrequired traditional retirement plan distributions and asset sales that result in large capital gains. Bonuses, deferred compensation and equity compensation could push you over the MAGI threshold, too. Exchange-traded funds may be preferable to mutual funds because they don’t make annual distributions.

At the same time, because the higher cap is temporary, you may want to try to maximize the SALT deduction every year it’s available. If your SALT expenses are less than $40,000 and your MAGI is below the reduction threshold for 2025, for example, you might pre-pay your 2026 property tax bill this year. (This assumes the amount has been assessed — you can’t pre-pay based only on your estimate.)

Uncertainty over PTETs

In response to the TCJA’s $10,000 SALT cap, 36 states enacted pass-through entity tax (PTET) laws to help the owners of pass-through entities, who tend to pay greater amounts of state income tax. The laws vary but typically allow these businesses to pay state income tax at the entity level, where an unlimited amount can be deducted as a business expense, rather than at the owner level, where a deduction would be limited by the SALT cap.

The OBBBA preserves these PTET workarounds, and PTET elections may remain worthwhile for some pass-through entities. An election could reduce an owner’s share of self-employment income or allow an owner to take the standard deduction.

Bear in mind, though, that some states’ PTET laws are scheduled to expire after 2025, when the TCJA’s $10,000 cap was set to expire absent congressional action. There’s no guarantee these states will renew their PTETs in their current form, or at all.

SALT deduction and the AMT

It’s worth noting that SALT expenses aren’t deductible for purposes of the alternative minimum tax (AMT). A hefty SALT deduction could have the unintended effect of triggering the AMT, particularly after 2025.

Individual taxpayers are required to calculate their tax liability under both the regular federal income tax and the AMT and pay the higher amount. Your AMT liability generally is calculated by adding back about two dozen “preference and adjustment items” to your regular taxable income, including the SALT deduction.

The TCJA increased the AMT exemption amounts, as well as the income levels for the phaseout of the exemptions. For 2025, the exemption amount for singles and heads of households is $88,100; it begins to phase out when AMT income reaches $626,350. For joint filers for 2025, the exemption amount is $137,000 and begins to phase out at $1,252,700 of AMT income.

The OBBBA makes these higher exemptions permanent, but for joint filers it sets the phaseout threshold back to its lower 2018 level beginning in 2026 — $1 million, adjusted annually for inflation going forward. (It doesn’t call for this change for other filers, which might be a drafting error. A technical correction could be released that would also return the phaseout thresholds to 2018 levels for other filers.)

The OBBBA also doubles the rate at which the exemptions phase out. These changes could make high-income taxpayers more vulnerable to the AMT, especially if they have large SALT deductions.

Navigating new ground

The OBBBA’s changes to the SALT deduction cap, and other individual tax provisions, may require you to revise your tax planning. We can help you chart the best course to minimize your tax liability.

Businesses with more than one owner benefit from having multiple viewpoints and varying skill sets. However, they also face serious risks of uncertainty and conflict if one of the owners suddenly departs or undergoes a major life change. A carefully crafted buy-sell agreement can guard against these risks — if it’s securely funded.

Transfer guidelines

A “buy-sell” (as it’s often called) is a legally enforceable contract among a company’s owners that sets guidelines for transferring ownership interests. It gives the remaining owners or the business itself the right — or, in some cases, the responsibility — to buy an exiting owner’s interest if a “triggering event” occurs. Such events may include an owner’s death, disability, divorce, retirement, voluntary departure, and loss of professional license or certification.

Essentially, the buy-sell creates a market for a withdrawing owner’s interest. It also defines how the price of an ownership interest will be determined, including identifying a valuation method and standard of value. By outlining when and to whom interests can be sold — and for how much — the agreement ultimately helps prevent conflicts among remaining owners or with the withdrawing owner’s family.

Popular choice

When a triggering event occurs, a substantial amount of money is typically needed to buy the departing owner’s interests. So, it’s critical to properly fund a buy-sell.

One popular choice is life insurance. Although such coverage might seem useful only to provide liquidity in the event of an owner’s death, it’s not limited to such situations.

The right policy, sometimes combined with riders or other types of coverage, can help ensure that departing owners or their beneficiaries efficiently receive the agreed-upon price for ownership interests following eligible triggering events. Meanwhile, it can ease the strain on the company’s cash flow and reduce the likelihood that the business will have to sell assets to fund an ownership interest buyout.

Various structures

Buy-sells can be structured to use life insurance in various ways. One option is a cross-purchase agreement, where each owner takes out a policy on each of the other owners.

For example, let’s say you buy coverage for your business partner. If that individual dies, triggering the buy-sell, you’ll collect the death benefit and use it to buy the ownership interest from your partner’s estate.

Assuming it’s large enough, the policy should guarantee you’ll have the funding to fulfill your obligations under the agreement. Other benefits include:

The insurance proceeds won’t be taxable as long as you plan properly, and
Your tax basis in the newly acquired interests will equal the purchase price.

On the downside, a cross-purchase agreement can be cumbersome if there are more than a few owners because of the number of policies required. It can also be unfair if there’s a significant disparity in owners’ ages or health, causing the policy premiums to vary substantially.

One alternative is establishing a trust or separate partnership to buy a policy on each owner. If an owner dies, the trust or partnership collects the death benefits on behalf of the remaining owners and pays each one’s share of the ownership interest buyout.

Another option is a redemption agreement. Under this approach, the business — not the individual owners — buys a policy on each owner’s life. The company holds the insurance and receives the proceeds following a qualifying triggering event, which it then uses to buy a departing owner’s interest.

A disadvantage of a redemption agreement is that the remaining owners won’t receive a step-up in basis when the company buys the departing owner’s interest. This can result in higher capital gains taxes.

Additionally, in the 2024 case of Connelly v. United States, the U.S. Supreme Court held that the value of corporate-owned life insurance used to meet a redemption agreement should be included in the value of a deceased owner’s business interest for federal estate tax purposes. And that doesn’t include any offsetting reduction for the company’s obligation to redeem the deceased owner’s interest.

The ruling may have adverse consequences for estates subject to the federal estate tax. Under current law, the unified federal estate and gift tax exemption is $13.99 million for 2025 and $15 million for 2026.

Bottom line

The bottom line is, if not properly funded, a buy-sell agreement won’t likely benefit anyone. Work with your attorney to create and occasionally review yours. Meanwhile, we can help you choose an optimal funding strategy and advise you on the tax implications.

As year end approaches, many businesses will soon be preparing for their annual audits. One key consideration is ensuring there are no potential conflicts of interest that could compromise the integrity of your company’s financial statements. A conflict of interest can cloud an auditor’s judgment and undermine their objectivity. Vigilance in spotting these conflicts is essential to maintain the transparency and reliability of your financial reports.

Understanding conflicts of interest

According to the American Institute of Certified Public Accountants (AICPA), “A conflict of interest may occur if a member performs a professional service for a client and the member or his or her firm has a relationship with another person, entity, product or service that could, in the member’s professional judgment, be viewed by the client or other appropriate parties as impairing the member’s objectivity.” Companies should be on the lookout for potential conflicts when:

Hiring an external auditor,
Upgrading the level of assurance from a compilation or review to an audit, and
Using the auditor for non-audit purposes, such as investment advisory services and human resource consulting.

Determining whether a conflict of interest exists requires an analysis of facts. Some conflicts may be obvious, while others may require in-depth scrutiny.

For example, if an auditor recommends an external payroll provider’s software to an audit client and receives a commission from the provider, a conflict of interest likely exists. Why? While the third-party provider may suit the company’s needs, the payment of a commission raises concerns about the auditor’s motivation in making the recommendation. That’s why the AICPA prohibits an audit firm from accepting commissions from a third party when it involves a company the firm audits.

Now consider a situation in which a company approaches an audit firm to assist in a legal dispute with another company that’s an existing audit client. Here, given the inside knowledge the audit firm possesses of the company it audits, a conflict of interest likely exists. The audit firm can’t serve both parties to the lawsuit and comply with the AICPA’s ethical and professional standards.

Managing potential conflicts

AICPA standards require audit firms to avoid conflicts of interest. If a potential conflict is unearthed, audit firms have the following options:

Seek guidance from legal counsel or a professional body on the best path forward,
Disclose the conflict and secure consent from all parties to proceed,
Segregate responsibilities within the firm to avoid the potential for conflict, and/or
Decline or withdraw from the engagement that’s the source of the conflict.

Ask your auditors about the mechanisms the firm has implemented to identify and manage potential conflicts of interest before and during an engagement. For example, partners and staff members are usually required to complete annual compliance-related questionnaires and participate in education programs that cover conflicts of interest. Firms should monitor for conflicts regularly because circumstances may change over time, for example, due to employee turnover or M&A activity.

Safeguarding financial reporting

If left unchecked, conflicts of interest can compromise the credibility of your financial statements and expose your company to unnecessary risks. Our firm takes this issue seriously and adheres to rigorous ethical guidelines. If you suspect a conflict exists, contact us to discuss the matter before audit season starts and determine the most appropriate way to handle it.

If your business sponsors health care benefits for its employees, you know the costs of doing so are hardly stable. And unfortunately, the numbers tend to rise much more often than they fall. According to global consultancy Mercer’s Survey on Health & Benefit Strategies for 2026, 51% of large organizations surveyed said they’re likely to make plan design changes to shift more costs to employees next year — presumably in response to price increases.

Small to midsize companies face much the same dilemma. With costs widely anticipated to rise, should you cut benefits, increase the cost-sharing burden on employees or hold steady? There’s no way to know for sure until you assess your current health benefit costs. Here are five ways to ascertain whether you’re spending wisely:

1. Choose and calculate metrics. Business owners can apply analytics to just about everything these days, including health care coverage. For example, you might use benefits utilization rate to identify the percentage of employees who actively use their benefits. Low usage may indicate your benefits aren’t aligned with the particular needs of your workforce.

Another metric is cost per participant, which is generally calculated by dividing total health care spend by number of covered employees. The result can help you judge the efficiency of your budget and potentially allow you to identify cost-saving opportunities.

2. Audit medical claims payments and pharmacy benefits management services. Mistakes happen — and fraud is always a possibility. By regularly re-evaluating claims and pharmacy services, you can identify whether you’re losing money to inaccuracies or even wrongdoing. Your business may need to engage a third-party consultant for this purpose, though some companies might be able to leverage training and specialized software to conduct internal reviews.

3. Scrutinize your pharmacy benefits contract. As the old saying goes, “Everything is negotiable.” Conduct a benchmarking study to see how your business’s pharmacy benefits costs stack up to similarly sized and situated companies. If you believe there’s room for negotiation, ask your vendor for a better deal. Meanwhile, look around the marketplace for other providers. One of them may be able to make a more economical offer.

4. Interact with employees to compare cost to value. The ideal size and shape of your plan depend on the wants and needs of your workforce. Rather than relying on vendor-provided materials, actively manage communications with employees regarding the design of your health care plan and its costs. Determine which benefits are truly valued and which ones aren’t.

Ultimately, your goal is to measure the financial impacts of gaps between benefits offered and those employees actually use. Then, explore feasible ways to adjust your plan design to close these costly gaps.

5. Get input from professional advisors. Particularly for smaller businesses, internal knowledge of health care benefits may be limited. Don’t get locked into the idea that you and your leadership team must go it alone.

Consider engaging a qualified consultant to help you better understand the full range of health care benefits available to your company. Ask your attorney to review your plan for potential compliance violations, as well as to check your contracts for negotiable items. Last, keep our firm in mind. We can perform financial analyses, audit claims, and offer strategic guidance to optimize spending and improve plan efficiency.

If you or your managers suspect fraud is occurring in your organization, you can’t afford to wait to act. According to the Association of Certified Fraud Examiners, the longer an occupational fraud scheme continues, the more it will cost the company a significant amount. So any suspicion should result in hiring a forensic accountant to investigate.

During an investigation, these professionals generally interview potential suspects and witnesses. But before they do, you should attempt to gather some basic facts by talking to employees who might know something.

Before you speak …

Before you interview anyone, consult your attorney to ensure you don’t create a legal liability. Then, decide what information you’re looking for. Knowing what you want helps you get to the truth of the matter quickly and avoid getting sidetracked by extraneous information. Then, identify who’s best able to supply that information.

Say, for example, you think an accounts receivable employee might be siphoning money. Talk to that person’s supervisor about typical work habits and any unusual behavior. Also, speak to the manager of your IT department about possible signs of file tampering or other misuse of your company’s tech resources. Keep in mind that people may be reluctant to share information if they think it reflects poorly on them or if it might get a colleague in trouble.

At the table

Set the tone with some introductory questions and ask the interviewee to agree to cooperate. In most cases, you’ll be looking for information that helps prove or disprove your suspicions, and the interview will be fact-finding in nature. It should last long enough for you to obtain all the information the subject has to offer. But don’t prolong sessions unnecessarily.

Aim for an informal, relaxed conversation and be sure to remain professional, calm and nonthreatening. Don’t interrupt unnecessarily, suggest that you have preconceived ideas about who did what, or assert your authority unnecessarily. If you suspect someone is withholding information, try asking more detailed questions. And if the employee says something you believe is untrue, ask for clarification. You might suggest that your question was misunderstood or that the person didn’t give it enough thought before answering.

Finally, never make threats or promises to encourage an employee to change a statement or confess. If the case ends up in court, such tactics could make the evidence you collect inadmissible. If someone persists in lying, ask them to put their statement in writing and sign it. Then turn the statement — and your suspicions — over to a forensic accountant.

Other information

You may be tempted to gather information by viewing a potential fraud perpetrator’s text, email and phone records. Make sure you talk to legal counsel first! Although employers generally can view employee messages on employer-issued devices, workers also enjoy an expectation of privacy in certain circumstances. You want to help ensure that any information you collect will be admissible in court (if the incident ends in a criminal or civil action). Contact us immediately if you suspect an employee is committing fraud.

One of the most critical decisions entrepreneurs make when starting or restructuring a business is choosing the right entity type. This choice directly impacts how the business is taxed, the level of administrative complexity and regulatory compliance obligations. While legal liability considerations also matter, we will focus on tax implications. For liability advice, consult a legal professional.

Whether launching a new venture or reassessing your current structure, understanding how each entity is taxed can help you make strategic and compliant decisions. Here’s a brief overview of five entities

1. Sole proprietorship: Simple with full responsibility

A sole proprietorship is the easiest structure to set up. It’s owned and operated by one person and requires minimal administrative effort. Here are the main features:

Taxation. Income and losses are reported on the owner’s personal tax return on Schedule C of Form 1040. Income is subject to 15.3% federal self-employment tax, and the business itself isn’t taxed separately. The owner may also qualify for a Qualified Business Income (QBI) deduction, potentially reducing the effective tax rate.
Compliance. Aside from obtaining necessary licenses or a business name registration, there’s little required paperwork. However, the owner is personally liable for all business debts and legal obligations.

2. S Corporation: Pass-through entity with payroll considerations

An S corp is a tax designation offering pass-through taxation benefits while imposing stricter rules. Here are the highlights:

Taxation. S corps don’t pay income tax at the entity level. Instead, profits or losses are passed through to shareholders via Schedule K-1 and reported on individual returns. A key tax benefit is that shareholders who are employees receive a salary (subject to payroll tax), while additional profit distributions aren’t subject to self-employment tax. However, the salary must be reasonable. The business is eligible for QBI deductions.
Compliance. To qualify, S corps must have 100 or fewer shareholders, all U.S. citizens or residents, and only one class of stock. They must file Form 2553, issue annual Schedule K-1s and follow corporate formalities like shareholder meetings and recordkeeping. An informational return (Form 1120-S) is also required.

3. Partnership: Collaborative ownership with pass-through taxation

A partnership involves two or more individuals jointly operating a business. Common types include general partnerships, limited partnerships, and limited liability partnerships (LLPs). Here’s what makes it unique:

Taxation. Partnerships are pass-through entities. The business files Form 1065 (an informational return), and income or loss is distributed to partners on Schedule K-1. Partners report this on their personal returns. General partners must pay self-employment tax, while limited partners usually don’t. The business is eligible for QBI deductions.
Compliance. Partnerships require a detailed partnership agreement, coordinated recordkeeping and clear profit-sharing arrangements. While more complex than a sole proprietorship, partnerships offer flexibility for growing businesses.

4. Limited liability company: Flexible and customizable

An LLC merges elements of corporations and partnerships, offering owners — called members — both operational flexibility and liability protection.

Tan. By default, a single-member LLC is taxed like a sole proprietorship, and a multimember LLC like a partnership. However, LLCs may elect to be taxed as a C or S corp by filing Form 8832 or Form 2553. This gives owners control over their tax strategies. LLCs that don’t elect C corp status are eligible for QBI deductions.
Compliance. LLCs require articles of organization and often must have an operating agreement. Though not as complex as corporations, they still generally face state-specific compliance requirements and annual filings.

5. C Corporation: Double taxation with scalability

A C corp is a distinct legal entity offering the most liability protection and growth potential through stock issuance. Here are its features:

Taxation. C corps face double taxation — the business pays taxes on earnings (currently at a 21% federal rate), and shareholders pay taxes again on dividends. However, C corps can offer deductible benefits (for example, health insurance, retirement plans) and retain earnings without immediately distributing profits. C corps aren’t eligible for QBI deductions.
Compliance: These entities require the most administrative upkeep, including bylaws, annual meetings, board minutes, and extensive state and federal reporting. C corps are ideal for companies seeking venture capital or IPOs.

After hiring employees

Regardless of entity type, adding employees increases compliance requirements. Businesses must obtain an Employer Identification Number (EIN) and withhold federal and state payroll taxes. Employers also take on added responsibilities related to benefits, tax deposits, and employment law compliance.

What’s right for you?

There’s no universal answer to which entity is best. The right choice depends on your growth goals, ownership structure and financial needs. Tax optimization is a critical factor. For example, an LLC electing S corp status may help minimize self-employment taxes if set up properly. Contact us. We can coordinate with your attorney to ensure your structure supports both your tax strategies and business goals.

Yeo & Yeo, a leading Michigan-based accounting and advisory firm, has been recognized by INSIDE Public Accounting (IPA) as a Top 200 Firm in the U.S. for the seventeenth consecutive year. In the 2025 IPA ranking of more than 600 participating firms based on net revenue, Yeo & Yeo ranked 114. The firm was also named among the 75 Best of the Best CPA firms.

This recognition comes at a time of growth and transformation for Yeo & Yeo. Over the past year, the firm has expanded its presence across Michigan, welcomed new team members through strategic acquisitions, and invested in emerging technologies.

“Our success is driven by our people and our focus on providing exceptional client service,” said Dave Youngstrom, President & CEO of Yeo & Yeo. “In the past year, we’ve embraced forward-thinking initiatives to strengthen our firm and provide long-term value for both our clients and our team. We’re honored to be recognized for the work we’re doing today and where we’re headed.”

As part of its growth strategy, Yeo & Yeo welcomed the professionals of Berger, Ghersi & LaDuke PLC and Amy Cell Talent, expanding the firm’s talent base to more than 275 professionals and enhancing its specialized service capabilities. Technology and innovation remain a core focus. The firm has introduced advanced tools such as robotic process automation (RPA) and Copilot AI to streamline workflows and create more efficient, seamless client experiences.

Internally, Yeo & Yeo remains committed to supporting its team through people-focused initiatives, including enhancements to the firm’s parental leave program and expanded learning and development opportunities. These efforts have helped cultivate a thriving workplace culture, supporting the firm’s ability to attract and retain top talent across its five entities: Yeo & Yeo CPAs & Advisors, Yeo & Yeo HR Advisory Solutions, Yeo & Yeo Technology, Yeo & Yeo Medical Billing & Consulting, and Yeo & Yeo Wealth Management.

“Our ability to evolve and anticipate the needs of our clients and communities is what sets us apart,” added Youngstrom. “Being named among the top firms in the country is a reflection of our team’s hard work, leadership, and vision for the future.”

View the list of top-ranked IPA firms.

If your Michigan business has 10 or fewer employees, you have until October 1, 2025, to fully comply with the Michigan Earned Sick Time Act (ESTA). There are many required updates to consider and prepare for – policy updates, payroll adjustments, and employee communication — starting now will make the transition far smoother.

What ESTA Requires for Small Businesses

Beginning October 1, 2025, eligible employees at small businesses will have the right to accrue and use paid sick time. This means you must have systems in place to:

Track accrual at a rate of 1 hour for every 30 hours worked (or frontload 40 hours at the start of the benefit year)
Allow up to 40 hours of paid sick time per year
Permit carryover of unused hours (if using accrual)
Pay sick leave at the greater of the employee’s regular rate or Michigan’s minimum wage
Maintain compliance with recordkeeping and notice requirements

Why You Should Prepare Now

Policy Updates – Your employee handbook and PTO policies must be updated to reflect ESTA’s requirements.
Payroll & Tracking Systems – Adjust accrual tracking in payroll or HR software to ensure compliance from day one.
Employee Communication – Prepare to post required notices and communicate changes to your team in a clear, consistent way.
Avoid Penalties – Non-compliance can result in costly fines and legal exposure.

Next Steps for Small Business Owners

Review Your Current PTO/Sick Leave Policy – Identify where it falls short of ESTA requirements.
Choose Accrual or Frontloading – Decide whether to track hours worked or grant sick leave up front each year.
Update Payroll & HR Systems – Ensure systems are ready to track and report correctly.
Post Required Notices – Use the state’s official poster and provide notices at hire and as required.
Train Managers & Supervisors – Make sure they understand how to approve and track sick leave requests under the new law.

Yeo & Yeo Can Help You Get Ready

Don’t wait until the deadline is looming — take advantage of our complimentary ESTA Readiness Assessment for Michigan businesses with 10 or fewer employees. In just a few quick questions, we’ll help you pinpoint your current compliance status and provide a tailored action plan so you’re fully prepared well before October 1, 2025.

Take the ESTA Readiness Assessment →

To support your preparation, we’ve also developed the Yeo & Yeo ESTA Toolkit — a comprehensive set of resources, guides, checklists, and templates created specifically for Michigan small businesses navigating the new requirements.

Your Yeo & Yeo advisor is here to walk you through the process, answer your questions, and help you implement changes that keep you compliant while supporting your employees.

If your Michigan business has 10 or fewer employees, the clock is ticking — the Michigan Earned Sick Time Act (ESTA) compliance deadline for small employers is October 1, 2025. This law introduces new requirements for paid sick leave that will directly impact your employee handbook.

Failing to update your handbook could leave your business vulnerable to compliance violations, fines, and employee disputes. Here’s what you need to know and what changes you should start making now.

1. Add a Paid Sick Time Policy That Meets ESTA Requirements

Your handbook must clearly explain how employees earn, use, and request paid sick time under ESTA. Key policy elements include:

Eligibility – All employees (full-time, part-time, temporary, and seasonal) are covered once they meet minimum work hour thresholds.
Accrual Rate – At least 1 hour of paid sick time for every 30 hours worked.
Annual Cap – Up to 40 hours per benefit year for small businesses.
Frontloading Option – Employers may choose to provide the full 40 hours at the start of the benefit year instead of tracking accrual.
Carryover Rules – If using accrual, employees can carry over up to 40 unused hours into the next year.

2. Define the Permitted Uses for Paid Sick Time

ESTA allows employees to use sick time for a variety of reasons beyond personal illness, including:

Their own physical or mental illness, injury, or medical care.
Caring for a family member with a health condition.
Absences related to domestic violence or sexual assault.
Public health emergencies that close the business or a child’s school.

3. Describe the Notice and Documentation Requirements

ESTA permits employers to require advance notice when the need for sick time is foreseeable, and to request documentation for absences of more than three consecutive days. Your handbook should:

Explain how employees should provide notice (email, phone, HR portal, etc.).
Set reasonable timelines for notice.
Detail acceptable documentation types (doctor’s note, public health notice, etc.).

4. Clarify Pay Rate and Recordkeeping

Paid sick leave must be compensated at the greater of the employee’s regular rate of pay or the Michigan minimum wage. Your policy should reflect this and align with your payroll practices.

You must also maintain accurate records of accrual, usage, and balances for at least three years — consider adding a section to your handbook noting how employees can check their balance.

5. Update Related Policies for Consistency

ESTA compliance can affect other areas of your handbook. Review and adjust:

Paid Time Off (PTO) policies, if sick time is combined with vacation.
Attendance and disciplinary policies, to ensure they don’t penalize lawful sick time use.
Leave of Absence sections, to coordinate with ESTA requirements.

6. Include the Anti-Retaliation Provision

ESTA prohibits retaliation against employees who request or use paid sick time. Your handbook should explicitly state that employees are protected from discipline, demotion, or termination for exercising their rights under the Act.

Yeo & Yeo Can Make the Process Easy

Updating your handbook doesn’t have to be overwhelming. Yeo & Yeo can make the handbook and policy process simple — whether you need custom policies and handbook updates or a templated approach that gets your small business in line with ESTA quickly. Our process is designed to be easy for you, while we take the heavy lift, handling the compliance details so you can focus on running your business.

Get Started Today

Begin with our complimentary ESTA Readiness Assessment — in just a few minutes, we’ll help you gauge your compliance level and outline the next steps.

Then, access the Yeo & Yeo ESTA Toolkit — a comprehensive set of guides, checklists, and templates designed specifically for Michigan small businesses facing the October 1, 2025, deadline.

As always, your Yeo & Yeo advisor is here to walk you through the process, answer your questions, and ensure your handbook protects both your business and your employees.

What State and Local Government Financial Leaders Need to Know

On June 23, 2025, the Governmental Accounting Standards Board (GASB) released GASB Implementation Guide No. 2025-1, Implementation Guidance Update–2025 (IG 2025-1), providing clarity on a range of accounting issues for state and local governments. With sixteen new questions and two amendments to previous guidance, IG 2025-1 addresses practical implementation challenges and helps with consistent application of GASB standards. This article summarizes the key topics, provides clear explanations, and includes practical examples to help government professionals understand the impact of these updates.

History and Background

The Role of GASB

The GASB was established in 1984 as an independent, private-sector organization to develop accounting and financial reporting standards for U.S. state and local governments. GASB’s mission is to promote clear, consistent, and comparable financial reporting, thereby increasing transparency and accountability for public sector entities.

Why Implementation Guides?

The GASB issues implementation guides to help governments apply its standards consistently and correctly. These guides are developed through a public due process, including exposure drafts and stakeholder feedback, to address real-world questions that arise as governments implement new or revised standards. Implementation guides are considered Category B authoritative guidance under the GAAP hierarchy, meaning they provide essential clarification when the primary (Category A) standards do not address a specific issue.

Evolution of Implementation Guidance

Over the years, the GASB has released multiple implementation guides to address evolving accounting issues, including those related to pensions, leases, financial reporting models, amongst others. Each guide is intended to supplement, not replace, the underlying standards. For example, the implementation guide for leases (IG 2019-3) provided critical assistance for applying complex new guidance related to leases under GASB 87.

IG 2025-1 continues this tradition by updating and expanding on previous guidance, reflecting new standards like GASB 100 (Accounting Changes and Error Corrections), GASB 101 (Compensated Absences), and GASB 103 (Financial Reporting Model Improvements). The guide also amends earlier Q&As for alignment with current standards and best practices.

Key Topics Covered in the Implementation Guide

Cash Flows Reporting: Key Points

When a transaction is reported as part of operating income in the operating statement but is classified in a different category on the statement of cash flows, it must also be presented as a reconciling item in the reconciliation of operating income to net cash flow from operating activities.

Example

A government-owned utility receives a grant that is included in operating income but is classified as a non-operating cash inflow on the cash flow statement. The grant must be shown as a reconciling item in the cash flow reconciliation.

Why It Matters
This clarification helps prevent double-counting or omission of significant transactions in the reconciliation process, supporting more accurate and transparent cash flow reporting.

Operating and Nonoperating Revenues and Expenses: Key Points

Interest revenue earned by a proprietary fund whose main activity is lending is considered operating revenue.

Interest expense from borrowing to fund operations is considered nonoperating expense.
Interest revenue from leases is not operating revenue; it is related to financing, not operations.
Amortization of deferred inflows of resources from leases is not related to the financing of the lease and should be reported as operating revenue.

Example

A city’s revolving loan fund earns interest from loans to local businesses. This interest is operating revenue. If the fund borrows money to make those loans, the interest paid on those borrowings is a nonoperating expense. If the city leases property and recognizes interest revenue from the lease, that interest is nonoperating revenue, and the amortization of deferred inflows of resources from the lease is operating revenue.

Why It Matters
Proper classification of revenues and expenses is essential for accurately reflecting the results of operations and for compliance with GASB 103, which redefines operating and nonoperating activities for proprietary funds.

Leases: Key Points

If a lease ends after a fixed period or upon a specific event (whichever comes first), the lease term is the fixed period of time which is the noncancellable period.
If a specific event occurs prior to the end of the lease term, the lease term should be remeasured.
When a lease is modified, remeasurement of the lease liability should be calculated from the modification date, not the original start date.

Example

A school district leases equipment for five years or until a grant expires. The five-year period is the lease term unless the grant ends earlier, in which case the lease is remeasured. If the lease is modified in year three, the liability is remeasured from the modification date.

Why It Matters
These clarifications help governments apply the complex lease accounting model under GASB 87, reducing the risk of misstatement and securing comparability across entities.

Conduit Debt Obligations: Key Points

If a component unit issues debt on behalf of its primary government, they are considered within the same reporting entity.
Therefore, the debt is not conduit debt.

Example

A city’s housing authority (component unit) issues bonds on behalf of the city (primary government). Because both are within the same reporting entity, the bonds are not conduit debt.

Why It Matters
This distinction affects how debt is reported and disclosed, impacting both the primary government and its component units and establishing proper classification in the financial statements.

Accounting Changes and Error Corrections: Key Points

Changing the threshold for capitalizing assets is not a change in accounting principle.
Adjustments to beginning balances should be shown in aggregate unless reporting unit separately displays each accounting change or error correction.
If a fund’s presentation changes from major to nonmajor, a separate column should be presented for the prior major fund, displaying only the opening balance and the adjustment to move that balance in the applicable resource flows statement.

Example

A special revenue fund that was reported as major in the prior year is not a major fund in the current year. In the current year statement of revenues, expenditures, and changes in fund balance, a separate column for the special revenue fund should be presented displaying only opening fund balance and an adjustment to zero out the balance, with a corresponding adjustment to opening fund balance in the nonmajor funds column.

Why It Matters
These details help governments implement GASB 100 correctly, making sure that changes and corrections are reported transparently and consistently.

Compensated Absences: Key Points

Known future pay rates should not be used to calculate the compensated absences liability.
Recognize pay rate changes only in the period they occur.

Example

An employee’s pay rate is to increase from $25 per hour to $28 per hour effective the first day of the subsequent year. In calculating the compensated absences liability as of year-end for the current year, the $25 per hour rate should be used.

Why It Matters
This prevents overstatement or understatement of liabilities, aligning with GASB 101’s focus on accurate measurement and making sure liabilities reflect current obligations.

Other Matters: Key Points

Subsidies are classified as noncapital if the provider does not limit the use of resources or limits the use to something other than capital asset acquisition.
Payments in Lieu of Taxes may be subsidies if used to support general government activities, but not if the payment is for goods/services.
Third-party insurance payments to government healthcare providers are not subsidies due to the contractual relationship between the insured individual and the third-party insurer.
If a primary government implements GASB 103 for the year ending June 30, 2026, a component unit with a December 31 year-end should implement in its December 31, 2025, statements.
Title to an asset does not always equal ownership for the purposes of GASB 34, as ownership is a collection of rights to “use and enjoy” property. There may be instances in which title is held by one entity, yet some rights to ownership are held by another. The facts and circumstances of the situation should be considered.
Special revenue funds are not required to be used to report restricted or committed revenues. Special revenue funds are only required to be used to report the general fund of a blended component or report restricted resources legally mandated to be included in a fund meeting the requirements of a special revenue fund.

Why It Matters
These clarifications allow for proper classification and reporting of subsidies, PILOTs, and other transactions, supporting compliance and transparency in financial statements.

Effective Date & Transition

Question 4.16 is effective upon issuance.
All other questions are effective for fiscal years beginning after June 15, 2025. Early adoption is encouraged if the relevant pronouncement is already implemented.
GASB 100-related questions are applied prospectively, others retroactively.
Changes related to the adoption of guidance in the IG should be reported as a change in accounting principle.

Note: This article is based on information available as of June 2025. For the most current guidance, consult the official GASB website or your professional advisor.

Related Reference Material

Governmental Accounting Standards Board. (2025). GASB Implementation Guide No. 2025-1, Implementation Guidance Update–2025. Norwalk, CT: GASB.
Governmental Accounting Standards Board. (2022). GASB Statement No. 76, The Hierarchy of Generally Accepted Accounting Principles for State and Local Governments. Norwalk, CT: GASB.
Governmental Accounting Standards Board. (2022). GASB Statement No. 100, Accounting Changes and Error Corrections. Norwalk, CT: GASB,
Governmental Accounting Standards Board. (2023). GASB Statement No. 101, Compensated Absences. Norwalk, CT: GASB.
Governmental Accounting Standards Board. (2019). GASB Statement No. 87, Leases. Norwalk, CT: GASB.
Governmental Accounting Standards Board. (2022). GASB Statement No. 96, Subscription-Based Information Technology Arrangements. Norwalk, CT: GASB.

As its name suggests, a living trust (also known as a revocable trust) is in effect while you’re alive. It’s a legal entity into which you title assets to be managed during your lifetime and after your death.

As the trust’s grantor, you typically serve as the trustee and retain control over the assets during your lifetime. Thus, you can modify or revoke the trust at any time, allowing for adjustments as circumstances or intentions change. Let’s take a closer look at why you should consider including one in your estate plan.
Setting up a living trust

To create a living trust, engage an estate planning attorney to draw up the trust agreement. Then, title the assets you want to transfer to the trust. Assets can include real estate, financial accounts, and personal items such as art and jewelry.

You’ll also need to appoint a successor trustee, or multiple successor trustees. The trustee can be a family member or a friend, or an entity such as a bank’s trust department. In the event of incapacity, a successor trustee can seamlessly take over management of the trust without the need for court-appointed guardianship or conservatorship, preserving financial stability and decision-making continuity.

Avoiding probate

A primary advantage of a living trust is its ability to minimize the need for trust assets to be subject to probate. Probate is the process of paying off the debts and distributing the property of a deceased individual. It’s overseen by a court.

For some estates, the probate process can drag on. By avoiding it, assets in a living trust can typically be distributed more quickly while still in accordance with your instructions.
In addition, probate can be a public process. Living trusts generally can be administered privately. And if you become incapacitated, the trust document can allow another trustee to manage the assets in the living trust even while you’re alive.

Knowing the pros and cons

Living trusts have both benefits and drawbacks. If you name yourself as trustee, you can maintain control over and continue to use the trust assets while you’re alive. This includes adding or selling trust assets, as well as terminating the trust. However, after your death, the trust typically can’t be changed. At that point, the successor trustee you’ve named will distribute the assets according to your instructions.

On the flip side, a living trust can require more work to prepare and maintain than a will. And you’ll probably still need a will for property you don’t want to move into the trust. Often, this includes assets of lesser value, such as personal checking accounts. In addition, if you have minor children, you’ll need to name their guardian(s) in a will.

Who can help?

Creating a living trust typically requires some upfront effort and legal guidance. Even so, the long-term peace of mind and control it can provide may make it a worthwhile consideration. We can help you determine how a living trust fits within your broader estate planning goals. Contact an estate planning attorney to draft a living trust.

Whether signing a vendor agreement, approving a repair estimate or applying for a loan, chances are you’ve signed something digitally in recent months. In 2025, digital documents and e-signatures are no longer just a convenience — they’re fast becoming the standard.

Businesses of all types and sizes are embracing digital workflows to improve efficiency, reduce turnaround times and meet customer expectations. If your company is still relying on paper documents and manual signatures, now may be the time to take a fresh look at what you might be missing.

Potential advantages

For small to midsize businesses, there are generally three reasons to use digital documents with e-signatures. First, of course, it’s faster. When you can review and sign a business document electronically, it can be transmitted instantly and approved much more quickly.

And this works both ways: your customers can sign contracts or submit orders for your products or services, and you can sign similar documents with vendors, partners or consultants. What used to take days or even weeks, as delivery services carried out their duties or paper envelopes crisscrossed in the mail, can now occur in a matter of hours.

Second, it’s a strong safeguard against disaster, theft and mishandling. Paper is all too easily destroyed, damaged, lost or stolen. That’s not to say digital documents are impervious to thievery, corruption and deletion. However, a trusted provider should be able to outfit you with software that not only allows you to use digital documents with e-signatures, but also keeps those files encrypted and safe.

Third, as mentioned, more and more customers want it. In fact, this may be the most important reason to incorporate digital documents and e-signatures into your business. Younger generations have come of age using digitized business services. They expect this functionality and may prefer a company that offers it to one that still requires them to put pen to paper.

Valid concerns

Many business owners continue to have valid concerns about digital documents and e-signatures. For example, you may worry about how legally binding a digitized contract or other important document may be. However, e-signatures are now widely used and generally considered lawful under two statutes: 1) the Electronic Signatures in Global and National Commerce Act of 2000, a federal law, and 2) the Uniform Electronic Transactions Act, which governs each state unless a comparable law is in place.

Indeed, every state has legislation in place legalizing e-signatures. There may be some limited exceptions in certain cases, so check with your attorney for specifics if you decide to transition to using the technology.

Another concern you might have is cybersecurity. And there’s no doubt that data breaches are now so common that business owners must expect hacking attempts rather than hope they never happen.

As mentioned, a reputable provider of digital document technology should be able to equip your company with the necessary tools to defend itself. But don’t stop there. If you haven’t already, establish a sound, regularly updated cybersecurity strategy that encompasses every aspect of your business — including when and how digital documents and e-signatures are used.

Strategic move

Implementing this increasingly used technology is a strategic move. As such, it will likely involve costs related to vetting software providers, training your team, and updating internal assets and processes. But it also may be a wise investment in faster transactions, improved security and a better customer experience. Plus, you’ll pay less in express delivery fees. We can help you evaluate the idea, forecast your return on investment, and, if appropriate, build a smooth transition plan that fits your budget and goals.

The One Big Beautiful Bill Act (OBBBA) contains a major overhaul to an outdated IRS requirement. Beginning with payments made in 2026, the new law raises the threshold for information reporting on certain business payments from $600 to $2,000. Beginning in 2027, the threshold amount will be adjusted for inflation.

The current requirement: $600 threshold

For decades, the IRS has required that businesses file Form 1099-NEC (previously 1099-MISC) for payments made to independent contractors that exceed $600 in a calendar year. This threshold amount has remained unchanged since the 1950s!

The same $600 threshold is in place for Forms 1099-MISC, which businesses file for several types of payments, including prizes, rents and payments to attorneys.

Certain deadlines must be met. A Form 1099-NEC must be filed with the IRS by January 31 of the year following the year in which a payment was made. A copy must be sent to the recipient by the same January 31 deadline.

A Form 1099-MISC must also be provided to a recipient by January 31 of the year following a payment, but unlike Form 1099-NEC, the 1099-MISC deadline for the IRS depends on how it’s submitted. If a business is filing the form on paper, the deadline is February 28. If the form is being submitted electronically, the deadline is March 31.

The new rules raise the bar to $2,000

Under the OBBBA, the threshold increases to $2,000, meaning:

Fewer 1099s will need to be issued and filed.
There will be reduced paperwork and administrative overhead for small businesses.
There will be better alignment with inflation and modern economic realities.

For example, let’s say your business engaged a freelance graphic designer and pays the individual $650 this year. You’ll need to send a 1099-NEC to the designer for calendar year 2025. But if you hire the same individual in 2026, you won’t be required to send a 1099 to the graphic designer or the IRS in 2027 unless the designer earns more than $2,000.

The money is still taxable income

Even if an independent contractor doesn’t receive a 1099-NEC because the amount paid was below the threshold amount, the payment(s) are still considered part of the individual’s gross income. The contractor must report all business income received on his or her tax return, unless an exclusion applies.

In addition, businesses must continue to maintain accurate records of all payments.

There are changes to Form 1099-K, too

The OBBBA also reinstates a higher threshold for Forms 1099-K, used by third-party payment processors. The reporting threshold returns to $20,000 and 200 transactions, rolling back the phased-in lower thresholds that had dropped toward $600 by 2026. This rollback undoes changes from the 2021 American Rescue Plan Act and earlier IRS delay plans.

Simplicity and relief

Raising the threshold will ease the filing burden for millions of businesses, especially small operations that rely on contractors. There will also be less risk that an IRS penalty will be imposed for failing to file a Form 1099 when required. Contact us with any questions about the new rules or your filing requirements.

As the federal gift and estate tax exemption increases, the number of families affected by gift and estate tax liability decreases. With the passage of the One, Big, Beautiful Bill Act (OBBBA), wealthy families now have greater certainty that the exemption amount will remain high and continue to increase in the future.

The exemption had been scheduled to return to an inflation-adjusted $5 million in 2026. But the OBBBA permanently increases it to $15 million for 2026. The amount will be adjusted annually for inflation. (For 2025, the exemption amount is $13.99 million.) Now, because many estates won’t be subject to estate tax, more planning can be devoted to easing the income tax bite for heirs.

Why income taxes matter

If you gift an asset to your child or other loved one during your life, your tax basis in the asset carries over to the recipient. If the asset has appreciated significantly in value, the sale of the asset will result in a capital gain.

For example, say you bought a piece of real estate 20 years ago for $200,000 and its value has grown to $1 million. If you give the property to your child, who decides to sell it, he or she will be liable for as much as $160,000 in long-term capital gains tax (20% of the $800,000 gain).

In contrast, when an asset is transferred at death — that is, via “bequest, devise or inheritance” — the recipient’s basis is “stepped-up” to the asset’s date-of-death fair market value. The recipient can turn around and sell the asset tax-free (apart from any tax on post-death gains). Thus, from purely an income tax perspective, it’s advantageous to hold on to appreciating assets rather than gift them during your life.

If you don’t expect that your estate will exceed the gift and estate tax exemption, retaining these assets until death can minimize the impact of income tax on your heirs. However, if your estate is large enough that estate tax liability is a concern, the possibility of income tax savings may be outweighed by the potential estate tax bill.

In that case, a better strategy may be to remove assets from your estate — through outright gifts, irrevocable trusts or other vehicles. Doing so will shield future appreciation in their value from the estate tax.

Crunch the numbers

To determine the right strategy for you and your family, you need to do some forecasting. By estimating the potential income and estate tax liabilities associated with various options, you can get an idea of whether you should focus your planning efforts on income tax or estate tax. Of course, if there’s little chance your estate will exceed the exemption, it makes sense to adopt strategies that minimize income tax. But for some families, it may be a closer call. Contact us with questions.

The Smart Medical Practice Toolkit was built to help healthcare professionals make informed, strategic business decisions. This collection of on-demand webinars and practical tools kicks off with a short webinar on how to value your medical practice.

In this quick, 15-minute session, Zaher Basha, CPA, CM&AA, walks through the when, why, and how of valuing your medical practice—insights that are essential whether you’re planning for growth, succession, or simply want to understand your practice better.

What You’ll Learn:

Reasons why a medical practice valuation is beneficial
Report types you might get when valuing your practice – and the different methods used to determine its worth
Necessary steps to get a medical practice valuation

Why Watch:
Understanding your practice’s value isn’t just about preparing for a sale. It’s about knowing where you stand today and how to position your practice for long-term success.

Watch the Webinar

Get Practical Resources for Your Practice

Yeo & Yeo’s Smart Medical Practice Toolkit is your go-to resource for navigating the financial, operational, and regulatory complexities of practice management. This collection includes brief, high-impact webinars, downloadable tools, and practical guidance—all built around the real challenges physicians and practice managers face.

Access the Toolkit

For many years, businesses of all shapes and sizes have at least considered sustainability when running their operations. Many people — including customers, investors, employees and job candidates — care about how a company impacts the environment. And reducing energy use, water consumption and waste generally lowers operational costs.

However, the current “environment regarding the environment,” has changed. With the passage of the One, Big, Beautiful Bill Act (OBBBA), the federal government has disincentivized businesses from taking certain green measures. So, you may be reevaluating your company’s stance on sustainability.

Apparent interest

According to one survey, a serious interest in sustainability remains present among many businesses. In February, management consultancy Kearney, in association with climate action media platform We Don’t Have Time, released the results of a survey of more than 500 finance executives from companies in the United States, United Kingdom, United Arab Emirates and India.

Of those respondents, 93% said they saw a clear business case for sustainability. Meanwhile, 92% expected to invest more in sustainability this year — with 62% of respondents saying they planned to allocate more than 2.1% of revenue to sustainability in 2025.

Now whether and how fully these investments come to fruition this year is hard to say. However, the fact remains that sustainability has been and will likely continue to be a strategically significant factor in many industries.

Vanishing tax breaks

As mentioned, the OBBBA has thrown a wrench into tax relief related to certain sustainable measures.

For example, the Section 179D Energy Efficient Commercial Buildings Deduction has been around since 2006. It got a big boost from the Inflation Reduction Act (IRA) of 2022, which increased the potential size of the deduction and expanded the pool of eligible taxpayers. However, the OBBBA permanently eliminates this tax break for buildings or systems on which construction begins after June 30, 2026.

The OBBBA also nixes an incentive for the business use of “clean” vehicles. The Qualified Commercial Clean Vehicle Credit, under Sec. 45W of the tax code, hadn’t been previously scheduled to expire until after 2032. However, it’s now available only for vehicles acquired on or before September 30, 2025. Depending on vehicle weight, the maximum credit is up to $7,500 or $40,000.

Has your company installed an electric vehicle charger or another qualified dispenser of or storage facility for clean-burning fuel? If so, you may be able to claim the Alternative Fuel Vehicle Refueling Property Credit under Sec. 30C of the tax code. The IRA had scheduled the credit — which is worth up to $100,000 per item — to sunset after 2032. But under the OBBBA, eligible property must be placed in service on or before June 30, 2026, to qualify.

Tailored strategy

Where does all this leave your business? Well, naturally, it’s up to you and your leadership team whether you want to address sustainability and, if you decide to do so, precisely how. Typically, when devising or revising a strategy in this area, your company should:

Conduct an up-to-date baseline assessment of energy use, water consumption, waste generation and your business’s overall carbon footprint,
Set clear goals and metrics based on reliable data and the input of professional advisors,
Address the impact of logistics, your supply chain and employee transportation, and
Communicate effectively with staff to gather feedback and build buy-in.

And don’t necessarily give up on tax incentives. Although some federal tax breaks may be going away in the near future, state and local ones might exist that could benefit your business.

Your call

Again, as a business owner, you get to make the call regarding your company’s philosophy and approach to sustainability. If it’s something you intend to prioritize, we can help you review your operations and identify cost-effective and possibly tax-saving ways to make a positive environmental impact.

The federal government has announced a major change that will affect how numerous Americans receive their tax refunds and federal benefit payments. The U.S. Treasury Department, the IRS and the Social Security Administration (SSA) will soon stop issuing paper checks. This transition is designed to increase efficiency, reduce fraud and lower administrative costs — but it also means that taxpayers must prepare for an all-electronic system.

Background information

Many taxpayers still receive paper checks for tax refunds. This is also the case with some Social Security benefits and other federal payments. Under an executive order (EO) signed by President Trump, paper checks will no longer be an option, effective September 30, 2025. Direct deposit will become the default (and only) method of payment, unless the government extends the deadline or provides exceptions.

In the EO, President Trump cites several reasons for eliminating paper checks. One is to reduce the risk of fraud. “Historically, Department of the Treasury checks are 16 times more likely to be reported lost or stolen, returned undeliverable, or altered than an electronic funds transfer,” the EO states.

Taxpayers without bank accounts

One significant challenge to making the transition away from paper checks is the “unbanked” population. These are people who don’t have traditional bank accounts. According to the FDIC, millions of Americans remain unbanked for various reasons, including lack of access, mistrust of banks or high fees.

The government may solve this challenge by issuing refunds on debit cards or encouraging financial institutions to offer free or low-fee accounts for affected taxpayers. Taxpayers without bank accounts should take steps now to open them to avoid delays in receiving their refunds.

Key implications

Some people may opt to request paper refund checks when filing their tax returns for reasons other than not having bank accounts. In some cases, they may have security or privacy concerns about providing account information to the IRS. Or perhaps they don’t know where they want to deposit their refunds when their tax returns are being prepared.

Here are three ways you may be affected after the federal government completes the transition from paper checks to an all-electronic system:

A bank account will be required. Taxpayers must have U.S.-based bank accounts or credit union accounts to receive their refunds.
There will be no more delays due to the mail. Direct deposit is faster than mailing paper checks, resulting in reduced wait times.
The risk of lost or stolen checks will be eliminated. Electronic transfers will eliminate fraud and identity theft associated with paper checks.

Special considerations for U.S. citizens abroad

Americans living overseas may encounter problems receiving electronic refunds. The IRS typically requires a U.S. bank account for direct deposit. Foreign accounts generally don’t work with the IRS refund system.

To address this issue, the government may offer exceptions or alternative payment methods for individuals outside the United States, but the details are still unclear. Expats should stay informed and plan ahead. The elimination of paper checks could necessitate setting up a U.S.-based bank account or using financial services that provide U.S. banking solutions.

Impact on other taxpayers

The American Institute of CPAs (AICPA) has provided feedback to the Treasury Department about the change. While the AICPA is generally in favor of eliminating paper checks, it raised some issues about taxpayers who may encounter problems with the change.

For example, executors and trustees must fill out forms that currently don’t have a place on them to enter direct deposit information. In addition, the name on an estate checking account won’t match the name on a deceased person’s final tax return. This violates an electronic refund requirement that the name on a tax return must match the name on a bank account into which a refund is to be deposited.

For these and other situations, the AICPA has recommended that the government provide exceptions or extensions of the deadline for certain taxpayers. The group would also like the IRS to provide more guidance on how to proceed in specific situations.

Social Security beneficiaries

The SSA reports that fewer than 1% of beneficiaries currently receive paper checks. If you’re one of them, visit the SSA to change your payment information to include a bank account or enroll in an option to receive your benefits with a Direct Express® prepaid debit card.

Bottom line

The elimination of paper checks is a significant shift in how federal payments are made. While this move will likely result in faster and more secure transactions, it also means taxpayers need to be prepared well before the September 30 deadline. The IRS and SSA will likely release additional guidance and outreach campaigns in the coming months.

If you have questions about how this change will affect filing your tax returns, contact us.