While headlines may make this sound like a major legalization milestone, the reality is more nuanced; and for business owners, especially in the cannabis space, understanding the distinction is critical.

What Does “Rescheduling” Mean?

For decades, cannabis has been classified as a Schedule I drug, alongside substances like heroin, meaning it was considered to have no accepted medical use and a high potential for abuse.

Moving cannabis to Schedule III signals something significant:

• The federal government now recognizes medical value
• It is considered lower risk than previously classified

Rescheduling changes classification, not legality.

Cannabis would still be federally controlled, just under a less restrictive category.

Why This Matters for Cannabis Businesses

This shift could have meaningful financial and operational impacts, even without legalization.

1. Major Tax Relief

Cannabis businesses have long been subject to IRS Code Section 280E, which prevents standard business deductions.

Rescheduling could eliminate that burden, allowing companies to deduct expenses like rent, payroll, and marketing, dramatically improving profitability.

2. Improved Research Opportunities

Schedule III status would make it easier for researchers to study cannabis, reducing regulatory barriers and expanding access to clinical data.

This could accelerate:

• Medical applications
• FDA-approved cannabis-based treatments
• Industry credibility

3. Better Access to Capital, But Not a Banking Fix

While rescheduling may reduce perceived risk for financial institutions, it does not guarantee full banking access.

Cannabis businesses could see gradual improvements in lending and investment, but major banking reform still requires separate legislation.

What Rescheduling Does Not Do

This is where confusion, and risk, often comes in.

Even under Schedule III:

• Cannabis is still federally illegal
• Interstate sales remain prohibited
• Dispensaries are not federally recognized businesses
• Products are not automatically FDA-approved
• State and federal law conflicts remain

Your day-to-day operations likely won’t change overnight.

Why This Isn’t Legalization

Legalization would mean:

• Federal legality across all states
• Interstate commerce
• Standardized regulation
• Broad access to banking and financial systems

Rescheduling does none of that.

Instead, it’s best understood as a transitional step, one that signals progress but stops short of full reform.

What Business Owners Should Do Now

If you’re in or adjacent to the cannabis industry, this is a moment to prepare, not assume.

Consider:

• Reviewing your tax strategy for potential 280E changes
• Monitoring regulatory updates closely
• Evaluating growth or reinvestment opportunities
• Staying compliant with both state and federal frameworks

The Bottom Line

Cannabis rescheduling is one of the most significant federal policy shifts in decades, but it’s not legalization.

For businesses, the opportunity lies in what it unlocks behind the scenes: tax relief, research expansion, and future reform momentum.

But for now, compliance, strategy, and clarity still matter more than ever.

More Resources:

• How do I find an accountant who works with cannabis clients? [VIDEO]
• Cannabis Industry Tax Services from Alloy Silverstein
• Alloy Silverstein: Cannabis Industry Services [PDF]
• More from Alloy Silverstein on Cannabis →

The post What Does Cannabis Rescheduling to Schedule III Mean for Businesses? appeared first on Alloy Silverstein.

The Benefits (and Pressures) for Family Members

For those who are part of the family, working in the business often brings meaningful advantages. There’s an inherent level of trust, opportunities to wear multiple hats, and a strong emotional connection to the company’s success. Many family members also experience a sense of stability and long-term job security.

However, those benefits can come with added pressure. Expectations are often higher, roles can become blurred, and leadership structures aren’t always clearly defined. It’s also not uncommon for personal conflicts at home to spill into the workplace, complicating professional relationships.

The Experience for Non-Family Employees

Employees who aren’t part of the family can also find great value in a family-run business. They often benefit from close access to leadership, faster decision-making, and a more flexible, personal work environment. Building long-term trust within a tight-knit organization can also be incredibly rewarding.

At the same time, these employees may face unique challenges. They might feel excluded from certain conversations or decisions, especially when family dynamics come into play. In some cases, they may perceive that family members’ ideas or opinions carry more weight, which can impact morale and engagement.

Finding the Balance

Successfully running, or working in, a family business requires intentional structure and communication. A few key strategies can make all the difference:

• Set clear roles and responsibilities to avoid confusion and overlap
• Keep personal conflicts out of the workplace to maintain professionalism
• Establish fair and transparent compensation practices
• Create space for all voices to be heard, regardless of family ties

When these elements are in place, family businesses can create an environment where both family and non-family employees thrive.

Building a Stronger Future Together

At its best, a family business leverages its strongest asset, its people. When trust, respect, and clear communication guide the workplace, the business becomes more than just a company; it becomes a place where everyone has the opportunity to grow and succeed.

More Resources:

• Succession Planning Tips for Small or Family Business [VIDEO]
• 5 Tips for Successfully Working With Family in Your Business [VIDEO]
• Working in a Family Business: The Advantages and Pitfalls
• Family Business: 5 Tips for When your Employees are Family Members

The post Navigating the Dynamics of Working in a Family Business [VIDEO] appeared first on Alloy Silverstein.

Here’s what you need to know to avoid costly mistakes.

Understanding Single-Member LLC Tax Treatment

A single-member LLC is considered a disregarded entity for tax purposes.

What does that mean?

It means the LLC does not file its own separate tax return. Instead, all business activity is reported directly on the owner’s personal tax return.

From the IRS’s perspective, the LLC essentially doesn’t exist as a separate taxpayer.

What Is a W-9 Used For?

Form W-9 is used to provide your taxpayer identification number (TIN) to someone who will be paying you.

Typically, this information is used to issue a Form 1099, which reports payments made to you during the year.

The IRS then matches:

• The income reported on the 1099
• With the income reported on your tax return

If those numbers, or more importantly – the tax ID numbers, don’t match, it can trigger issues or notices.

The Most Common Mistake

Many single-member LLC owners make the mistake of using their LLC’s EIN when filling out a W-9.

However, according to IRS guidance, this is incorrect.

What Tax ID Should You Use?

The correct tax ID depends on who ultimately owns the LLC:

• If the LLC is owned by an individual:
  Use the owner’s Social Security Number (SSN)
• If the LLC is owned by a corporation:
  Use the corporation’s Employer Identification Number (EIN)

The key rule: The W-9 should reflect the tax ID that appears on the owner’s tax return, not the LLC’s EIN.

Why This Matters

The IRS is very clear, especially in the latest draft instructions for Form W-9, that you should not use the EIN of a disregarded entity.

Because the LLC is disregarded for tax purposes, the IRS “looks through” it and matches income to the actual taxpayer.

Using the wrong tax ID can lead to:

• Mismatched records
• IRS notices
• Backup withholding in some cases

Key Takeaway

Even if your single-member LLC has its own EIN, that’s not what belongs on your W-9 in most cases.

Always report the tax ID of the ultimate taxpayer, the person or entity that actually files the tax return.

When in doubt, it’s worth confirming with your tax advisor to ensure everything is reported correctly.

More Resources:

• Your Business’s Essential Tax Return Filing Checklist
• Numbers to Know From Your Business’s Tax Return
• Business Entity Decisions – Should My Business be a Partnership, LLC, or Sole Proprietorship?

The post How Should a Single-Member LLC Fill Out a W-9? [VIDEO] appeared first on Alloy Silverstein.

Rounding Cash Transactions

How cash payments will be affected.
With the phaseout of the one-cent coin in the U.S., cash transactions will now be rounded to the nearest five cents.

Accounting Remains Precise

Your system still tracks cents.
This does not impact your pricing, sales tax calculations, or financial reporting. Your accounting system still tracks transactions down to the cent.

Cash Only, Not Cards or Checks

Rounding only affects cash payments.
The rounding only applies to the final total in cash payments, not credit cards, ACH, or checks.

Impact on Retail Businesses

Small adjustments at the register.
If you run a retail or cash-heavy business, you may notice minor rounding differences. These are typically recorded as a “cash over/short” or rounding expense.

Service-Based Businesses

Likely no impact.
For most service-based businesses, you likely won’t see any impact at all.

Bottom Line

Accounting still works in cents.
Your accounting still works in cents, even if your cash drawer doesn’t. If you have questions, consult your CPA before making changes.

More Resources:

• How to Prepare for a Penny-Free Economy
• What Will Change When the Penny Is Gone? Everyday Impacts You Might Not Expect
• What Do Postmarks, Pennies, and Paper Checks Have to Do with Your Taxes? [VIDEO]
• What to Do with Your Pennies Before They Disappear

The post What the Penny Phaseout Means for Your Business [VIDEO] appeared first on Alloy Silverstein.

Tax season is a natural checkpoint for business owners. It is a moment to pause, review the numbers, and make sure your financial foundation is solid. Beyond tax compliance, a few proactive steps can help you make smarter decisions and stay prepared for whatever the year brings.

Here are five practical ways to keep your business financially healthy.

1. Get your financial statements up to date

Accurate, current financials are essential for sound decision-making. When your cash flow, revenue, expenses, assets, and liabilities are clearly reflected, you can evaluate what is really happening rather than relying on assumptions.

Outdated or incomplete records can lead to costly missteps, such as cutting expenses in areas that are actually driving long-term growth. Up-to-date financial statements give you the clarity to respond strategically instead of reactively.

2. Build a 12-month forecast

Once your current numbers are reliable, use them to look ahead. A monthly forecast for the next year helps you anticipate upcoming cash needs, seasonal changes, and potential pressure points.

While no forecast is perfect, planning ahead allows you to test assumptions and make informed adjustments as conditions change. Businesses that plan are better positioned to adapt.

3. Prepare for multiple scenarios

Uncertainty is part of running a business, which is why scenario planning is so valuable.

Develop three versions of your forecast:

• A best-case scenario
• A most-likely scenario
• A worst-case scenario

For each, outline potential cost adjustments and action steps. This exercise helps you avoid rushed decisions and gives you a clear plan if conditions shift unexpectedly.

4. Communicate early and often

Clear communication with employees, customers, vendors, and lenders is essential, especially during periods of change. When people understand your thinking and direction, trust remains intact and assumptions do not fill the gaps.

Even when conversations are difficult, transparency helps prevent confusion, strained relationships, and avoidable disruptions down the line.

5. Stay connected with your advisors

Your advisory team, including your accountant, attorney, lender, and insurance professional, plays an important role beyond tax filing.

These advisors bring an outside perspective, insight into what other businesses are navigating, and awareness of tax law changes or planning opportunities that may impact your bottom line. Staying connected throughout the year helps ensure you are not leaving opportunities on the table.

The bottom line:

Strong financial health is built through consistent planning, clear communication, and informed guidance. With the right structure and support in place, your business is better positioned to move forward with confidence.

How Alloy Silverstein can help

At Alloy Silverstein, we work with business owners year-round to turn financial information into meaningful insight. If you have questions about forecasting, cash flow planning, or tax strategies for the year ahead, our team is here to help you plan with clarity and confidence.

The post Keep Your Business in Top Financial Shape with These Tips appeared first on Alloy Silverstein.

Here’s a step-by-step guide to building a practical cash flow forecast for 2026.

Why You Need a Cash Flow Forecast

Even profitable businesses can run into cash shortfalls. Forecasting helps you anticipate tight periods, plan for taxes or debt payments, and make strategic decisions about hires or equipment purchases.

Create Three Cash Flow Scenarios:

Most likely, best case, and worst case scenarios show you flexibility and risk:

• Most Likely Case: Base this on last year’s cash patterns, customer contracts, and recurring expenses.
• Best Case Scenario: Explore what could happen if sales are higher or costs lower than expected.
• Worst Case Scenario: Identify potential risks, plan expense reductions, and prepare financing options.

Build Your Own Forecast

1. Gather your information, including bank statements, outstanding invoices, regular expenses, loan payments, and tax obligations. Good data makes forecasting easier and more reliable.
2. Build a simple monthly forecast that focuses on cash timing rather than accounting profit. Use three versions so you can compare outcomes side-by-side.
3. Review your forecast regularly and update it as real numbers replace estimates. Use what you learn to guide spending, pricing, and planning decisions throughout the year.

Reviewing and Adjusting Your Forecast

Cash flow forecasting is not a “set it and forget it” exercise. Your business environment changes—customers pay at different times, expenses fluctuate, or unexpected opportunities arise. Review your forecast monthly, at a minimum, to compare actual cash inflows and outflows against your projections. Adjust for new information, such as upcoming contracts, seasonal trends, or planned expenditures. Doing so ensures your forecast remains a reliable tool for decision-making rather than a static snapshot.

Why this matters: Regular review keeps your forecast accurate and actionable. It helps you spot potential shortfalls early, make timely adjustments, and maintain control over your cash position.

How Cash Flow Forecasting Guides Smart Business Decisions

Think of a cash flow forecast asa strategic resource, not just a financial management tool. By knowing when cash will be available, business owners can make smarter, proactive decisions:

• Hiring and staffing – Avoid overextending payroll when cash is tight.
• Investment planning – Determine the best timing for equipment purchases, marketing campaigns, or expansion initiatives.
• Financing decisions – Understand whether you need short-term loans or can safely pay down existing debt.
• Risk mitigation – Spot potential cash shortages before they become crises, giving you time to adjust operations or negotiate terms.

By actively monitoring cash flow, your forecast becomes a roadmap for growth, stability, and smarter business decisions, turning reactive management into strategic planning.

An effective, real-time cash flow forecast helps you see ahead, act strategically, and avoid surprises. Alloy Silverstein can help you create a forecast tailored to your business, integrate it with your bookkeeping, and use it to make confident, informed decisions. Contact us to get started.

The post How to Build a Practical Cash Flow Forecast for 2026 appeared first on Alloy Silverstein.

This checklist outlines the key records and information your business should have in place before filing begins. Staying organized upfront can reduce stress, avoid last-minute surprises, and help your CPA file an accurate return that reflects the full picture of your business.

Essential #1 – Books that actually add up.

Accurate books aren’t just helpful, they’re the foundation of a reliable return.

• Reconcile accounts before filing begins
• Make sure income and expenses are recorded consistently
• Confirm your accounting software matches your bank records
• Review prior year adjustments or corrections

Essential #2 – Payroll that matches the paperwork.

Payroll accuracy isn’t just about timeliness, it’s about making sure every number tells the right story.

• Double-check W-2s and 1099s for accuracy
• Verify all payroll tax deposits have been filed
• Keep records of bonuses, commissions, and benefit payments
• Confirm year-end payroll summaries match reported figures

Essential #3 – Look back to file forward.

What you reported last year matters because it sets the stage for this year’s return.

• Review deductions and credits from the prior year
• Carry forward losses, depreciation, or credits if applicable
• Ensure consistency in how income and expenses are reported
• Compare net income trends to flag unusual changes

Essential #4 – Gather evidence that backs every claim.

Every deduction should come with backup.

• Keep receipts, invoices, and logs for every deduction
• Organize digital records in one place
• Separate personal and business expenses clearly
• Maintain mileage logs for vehicle-related deductions

Essential #5 – The right papers for the right structure.

Your filing should reflect your business structure, down to the details.

• Make sure incorporation or partnership documents are current
• Verify ownership percentages and agreements
• Keep a record of major business decisions
• Review changes in entity type or tax election status

Essential #6 – Confirm what you’ve already paid.

Before finalizing anything, make sure your estimated tax payments are accounted for.

• Gather records of quarterly payments
• Check totals against what’s reported on the return
• Correct any discrepancies early
• Verify any prior overpayments or credits applied

Essential #7 – Update your list of fixed assets.

Your fixed asset schedule can become cluttered with equipment you no longer use.

• Update depreciation schedules for all business assets
• Make sure new asset purchases are recorded with correct start dates
• Confirm depreciation methods (e.g., straight-line vs. accelerated) match your filing strategy
• Review Section 179 or bonus depreciation opportunities

Essential #8 – Review credits you may qualify for.

Tax credits can be powerful, but only if you’re eligible and prepared to prove it.

• Review current-year tax credits available for your business type or industry
• Confirm documentation for each credit (e.g., R&D, energy efficiency, hiring incentives)
• Make sure you haven’t double-counted expenses used for credits and deductions
• Track carryforward credits from previous years

Tax credits and depreciation rules change frequently, making year-over-year review especially important.

Partner with an Alloy Silverstein Business Advisor

Filing your 2025 business tax return doesn’t have to be a scramble. This checklist can help you stay organized, identify gaps early, and approach tax season with confidence.

At Alloy Silverstein, we go beyond filing. Our CPAs and Client Advisory Services team help business owners keep their books accurate year-round, identify planning opportunities, and use financial data to make smarter decisions — not just meet deadlines.

If you’d like help preparing your records, cleaning up your books, or building a more proactive tax and accounting strategy, contact Alloy Silverstein today. We’re here to help your business stay compliant, informed, and positioned for growth.

The post Your Business’s Essential Tax Return Filing Checklist appeared first on Alloy Silverstein.

Rather than eliminating taxes on tips altogether, the law introduces a new tax deduction for certain tip income, subject to several rules and limitations. Here’s what you need to know about how this provision may impact your tax return.

It’s Actually a Deduction, Not a Tax Exemption

The provision included in the One Big Beautiful Act allows eligible taxpayers to take a tax deduction on certain tip income. This means tips are still reported as income, but qualifying taxpayers may be able to deduct a portion of that income when filing their tax return. However, this deduction is temporary and only applies to tax years 2025 through 2028.

Annual Deduction Limit

The deduction is capped at $25,000 per tax return per year.

It’s important to note that this limit applies per return, not per person. For example:

• A married couple filing jointly can only claim up to $25,000 total, even if both spouses earn tip income.
• The deduction does not double for two tip earners.

Income Phase-Out Limits

The deduction begins to phase out for higher-income taxpayers.

The phase-out thresholds are:

• $150,000 Adjusted Gross Income (AGI) for single filers
• $300,000 AGI for married couples filing jointly

Additionally, if you are married, you must file a joint return to claim the deduction, and the individual claiming the tip deduction must have a valid Social Security number.

Not All Tips Qualify

To be eligible for the deduction, tips must meet specific criteria. First, the tips must be earned in an occupation that appears on the Treasury Department’s list of commonly tipped occupations. Second, the tips must be considered “qualified tips.” One of the most important requirements is that the tip must be voluntarily paid by the customer.

This means the following do not qualify:

• Automatic service charges
• Mandatory gratuities
• Fees added to a bill by the business

Only voluntary tips from customers are eligible.

Reporting Tips on Your Tax Return

Another important requirement is that tips must be properly reported. For tax year 2025, reporting may be somewhat confusing because Form W-2 will look the same as it did in previous years. The form will still show total tips earned but will not distinguish between qualified and non-qualified tips.

The IRS has indicated that taxpayers should do their best to report the correct amount for the 2025 tax year. Many experts believe the IRS will be unlikely to challenge taxpayers who simply use the total tip amount reported on their W-2 when calculating the deduction.

Changes Coming in 2026

Starting in tax year 2026, reporting will become more structured.

Employers will be required to:

• Track qualified tip income
• Report the qualified amount separately

This should make it easier for taxpayers to determine exactly how much tip income qualifies for the deduction.

A New Form Will Be Required

To claim the deduction, taxpayers will need to complete a new form called Schedule 1A, where the amount of the deduction will be calculated. The deduction is available whether you itemize deductions or take the standard deduction, making it accessible to a wide range of taxpayers.

While the phrase “no tax on tips” may sound straightforward, the reality is that this provision is a temporary deduction with specific eligibility rules. Tip earners should be aware of the limitations, reporting requirements, and upcoming changes to ensure they receive the full benefit available to them.

If you earn tip income and have questions about how this deduction may affect your tax return, working with a tax professional can help you navigate the rules and maximize your tax savings.

More Resources

• When Does No Tax on Tips and Overtime Take Effect? Breaking Down the 2025 Changes
• No Tax on Tips: What You Need to Know About the New Tax-Free Tip Rule
• Tax-Free Tips Are Here: Start Tracking Now!

The post How the “No Tax on Tips” Provision Could Affect Your Tax Return [VIDEO] appeared first on Alloy Silverstein.

Your business’s tax return is more than a compliance document—it’s a snapshot of your financial performance and a guide to smarter decision-making for the year ahead. By reviewing key numbers from your return, you can identify opportunities to improve efficiency, optimize your tax strategy, and better plan for cash flow needs.

Here are several ratios and metrics to pull from your business’s most recent tax return and track over time. Comparing these numbers year over year can help highlight trends, potential risks, and areas for growth.

Effective tax rate = Total tax liability / Total income

Take your total tax liability from your most recent tax return and divide it by your gross income from that return. Do this calculation for your three most recent tax returns and compare the results.

If your effective tax rate increased, it may mean certain deductions dropped off, income grew faster than expected, or your business structure is no longer a good fit. A decrease could be a sign of one-time factors that may not repeat, like the purchase of expensive equipment.

(Note: Remember if you have a pass-through entity, your business’s tax liability will be found on your individual tax return.)

Planning tip: Use this rate to estimate future tax liability more accurately, so you can set aside the right amount of cash to make estimated tax payments throughout the year. It can also be used to evaluate whether changes to compensation, retirement contributions, or entity type are worth exploring in 2026.

Owner tax burden = Total tax liability / Total owner compensation (or distributions)

Owner tax burden looks at how much of the cash an owner takes out of the business that ultimately goes to taxes. A high owner tax burden may signal that compensation is structured inefficiently, estimated payments are off, or the entity type is creating unnecessary tax friction.

Planning tip: This number can guide changes to how you pay yourself (salary vs. distributions), timing of bonuses, retirement contributions, and even whether a different business structure would leave more cash in your hands.

Operating expense ratio = Total operating expenses / Total revenue

This ratio gives a clear view of how efficiently the business runs day-to-day. A rising ratio often signals creeping overhead. Expenses may be increasing faster than revenue, even if total profit still looks acceptable. A falling ratio usually points to improved efficiency, better pricing, or stronger cost control. Neither is good or bad on its own, but comparing ratios over time matter.

Planning tip: Remember this ratio is outside of your gross margin percent (Cost of Goods Sold/Net sales). Use this ratio as a guardrail to control against creeping overhead expenses. Try to make the percent of sales go down every year. If the number starts creeping up, it’s often a sign to slow hiring, reduce other expenses, or adjust pricing before margins erode. A common culprit outside of payroll is annuity billing and outside consulting expense.

Putting It All Together

By tracking your effective tax rate, owner tax burden, and operating expense ratio, you gain actionable insights into how your business is performing and where adjustments may be needed. These metrics are simple to calculate but powerful in helping you make informed decisions about compensation, expenses, pricing, and long-term planning.

How Alloy Silverstein Can Help

At Alloy Silverstein, we work with business owners to turn tax data into actionable insights. Our CPAs and tax advisors can help you interpret these numbers, plan for 2026, and implement strategies to maximize efficiency, reduce tax friction, and keep more cash in your business.

If you’re ready to make your tax return work harder for you, contact us today.

The post Numbers to Know From Your Business’s Tax Return appeared first on Alloy Silverstein.

Both qualified overtime and qualified tips must be reported separately on the W-2, using new codes in box 12 and a new box 14b for the tipped occupation code.

Track overtime accurately

• Record employee hours carefully, including overtime worked beyond 40 hours per week.
• Calculate the extra “half-time” above the regular rate correctly.
• Separate overtime pay from bonuses or other discretionary pay.

Track tips carefully

• Record qualified tips such as cash, credit, debit, or gift card tips.
• Exclude service charges, mandatory gratuities, and non-cash items.
• Ensure employees report tips promptly and keep documentation.

Best practices for business owners

• Reconcile payroll data each pay period.
• Audit overtime and tip records regularly.
• Maintain clear documentation for all deductions.

Partner with experts

Working with a trusted payroll provider simplifies compliance. Abacus Payroll can help set up reporting codes, generate accurate payroll and tax reports, and ensure your business and employees fully benefit from available deductions. The key to a smooth year ahead is clear: track carefully, report accurately, and rely on a trusted advisory team.

The post Stay Compliant in 2026: Tracking Overtime and Tips appeared first on Alloy Silverstein.