As your not-for-profit looks for new ways to strengthen long-term financial performance, you might be considering alternative investments. They boost diversification and can provide higher returns than traditional investments. But they also can add complexity and risk, increase investment costs, and expand tax exposure. Before committing assets, be sure to assess the pros and cons for your organization.

Complexity and risk

Alternative investments are typically defined in contrast to traditional securities, such as stocks, bonds and mutual funds. They generally don’t have an easily ascertained fair market value. Examples include hedge funds, private equity, real estate, venture capital and cryptocurrency investments.

Such investments may provide access to high-growth companies in cutting-edge industries. However, because alternative investments may be illiquid, investors typically can’t easily cash out or shift their allocations. This can be a substantial risk to nonprofits without other sources of available operating capital. The complex nature of such assets also increases risk for investors, which is why returns may be higher.

Investment costs

Typically, alternative investment funds are formed as partnerships or limited liability companies (LLCs). Both are types of pass-through entities, meaning the income and the tax liability pass through to investors, who are considered partners or members.

The fund manager is crucial. You want to choose a fund with a manager who has a proven track record and access to the best investments. Also, pay attention to management fees. In addition to a base management fee (generally about 1% to 2% of the fund’s capital or net asset value), managers generally charge performance-based fees known as carried interest. These fees can reach as high as 20% or more of an alternative investment’s profits.

Tax exposure

Although a nonprofit’s investment income (for example, from dividends, gains and interest) typically is excluded from taxable unrelated business income (UBI), investors in partnerships or LLCs are treated as though they’re conducting that entity’s business. As a result, income distributions may be treated as taxable UBI.

In addition, UBI includes unrelated debt-financed income from investment property in proportion to the debt acquired to purchase it. The IRS defines debt-financed property as any property held to produce income (including gain from its disposition) for which there’s an acquisition indebtedness. If you use financing to invest in a fund — or, if the fund has financed the purchase of an income-producing asset — some of the associated income may be taxable.

Pass-through entities report each partner’s or member’s share of income, dividends, losses, deductions and credits on IRS Schedule K-1. Nonprofits can use the schedule to determine whether they’ve received UBI that must be reported. State filing obligations may also apply, particularly when a fund operates in multiple states.

Careful consideration is essential

Alternative investments can potentially play a valuable role in your nonprofit’s investment strategy, but they require careful consideration of the financial and tax implications. Contact us for help determining if alternative investments are right for your organization.

© 2026

The post The pros and cons of alternative investments for nonprofits appeared first on KBST&M.

These days, many people are evaluating recurring expenses and deciding which memberships deserve a place in their budgets. At the same time, members increasingly expect personalized experiences, flexible engagement options and clear value from the organizations they support. If renewals are slowing at your nonprofit, it’s time to strengthen your retention strategy.

Learn what today’s members expect

To keep members, you may have to offer something they need. For example, you could offer education, networking opportunities, research, discounts or credentials. And the only sure way to get a handle on what your members need is to ask them.

You can accomplish this through formal surveys, focus groups and online polls, as well as by simply asking your members when you talk with them. How are your services (and products, if applicable) meeting their needs? What do they need that you’re not providing? Member expectations continue to evolve quickly, especially as technology, workplace trends and communication preferences change. So, check in with members regularly.

Reinforce the impact of membership

Providing the right offerings is important. But you also must emphasize your organization’s value proposition. This is the unique experience your members have when they interact with your nonprofit and its offerings.

Try making an emotional appeal that taps into the intangibles of being part of your group. Depending on your mission, you might tout the value of individuals banding together to create a powerful voice for change, the chance to help improve the conditions in your community or the ability to network with local or industry leaders.

Share measurable outcomes whenever possible. Members are increasingly motivated by seeing how their participation contributes to real-world impact.

Offer flexible and personalized ways to participate

In general, members who are deeply involved will stick with your organization. Create as many avenues as you can for them to participate, for example, as board and committee members, event volunteers, or publication contributors.

Treat members as individuals whenever possible. Always address correspondence to them specifically (never to “member at large”) and consider offering them personalized content when they visit your website. Also, make sure it’s easy to renew membership on your website and that the renewal process supports multi-year memberships — possibly at a discounted rate.

Digital convenience matters more than ever. Members increasingly expect a mobile-friendly renewal process, self-service account management and communication tailored to their interests and participation history.

Use your social media channels to further enhance your communication efforts. Give members a reason to follow you by regularly posting updates, event photos and other engaging content. If your organization is top of mind, members are more likely to stay involved.

Address budget concerns proactively

Even with the most effective retention strategies in place, financial pressures still influence many membership decisions. Rather than ignoring this reality, communicate openly and show members that you understand the competing demands on their budgets.

Some organizations are finding success with installment payment options or tiered memberships. Limited-time incentives can also make renewals more manageable for members.

A bright future

Taking these approaches can help you deepen member loyalty and encourage long-term commitment. Most important, continue to demonstrate the ongoing value and impact of membership. Strong member relationships — built on relevance, flexibility and trust — can help nonprofits sustain engagement well into the future.

© 2026

The post How nonprofits can better engage members and encourage renewals appeared first on KBST&M.

Given the many potential threats to your business’s assets, cash flow and human resources, which types of insurance products and how much coverage do you need? Some organizations pay for policies that don’t make sense based on their industry or operations. Others have inadequate coverage where risk may be significant. What about your business? It helps to first understand what’s available.

The basics

The most basic kind of business insurance is general liability. Essentially, it covers claims for bodily injury to third parties and property damage arising from business operations. For example, general liability typically protects your business if a customer slips and falls in your facility because someone failed to clean up a slippery floor. Or, in a more extreme example, it might cover the fallout if a piece of equipment explodes, injuring customers and employees and damaging the property you rent.

Other coverage related to and often included in general liability policies includes:

Product liability. This type of policy protects businesses against harm or injury caused by product defects. This coverage is especially important if you sell products that could potentially harm people, such as chemicals, electronics and automobiles.

Professional liability or errors and omissions (E&O). Sometimes general liability and E&O can be rolled into a single policy, but you might not need E&O. It generally applies to negligence when providing a professional service, including legal, engineering, consulting, accounting and architectural services.

Property. This is the business equivalent of homeowner’s insurance. It protects your organization against the cost of losses from factors beyond your control, such as fires and natural disasters. You might also need auto insurance if your business owns and operates vehicles.

Business interrupted

Even if you have general liability and property coverage, you may also need business interruption insurance. This coverage comes into play when a business must halt operations due to a manmade or natural disaster. So if, for instance, a fire forces you to suspend operations for weeks or months while making repairs to your facility, a business interruption policy could help you pay bills in the meantime.

Your operations might also be disrupted by a cyberattack or data breach. Cyberinsurance can help your business respond to losses related to hacking, ransomware attacks and compromised customer or employee data. Depending on the policy, coverage may include costs associated with business interruptions, data recovery, legal claims and regulatory response.

Key person insurance protects against another type of disaster: The sudden loss of a business partner or executive. If an owner dies unexpectedly, the policy can provide living owners with the cash to buy the deceased owner’s shares. Or it could help cover lost profits associated with a key person’s death or pay for the costs of replacing the key person.

Employee risks

Employment practices liability insurance (EPLI) is valuable to any business with employees, regardless of industry. Typically, it protects against violations of Civil Rights Act. EPLI coverage areas include employment discrimination, wrongful termination, sexual harassment and emotional distress. If such violations occur in your organization and you fail to take necessary remedial action, an EPLI policy can cover your defense fees and settlement costs.

EPLI may also cover wage and hour violations. These generally relate to a business’s failure to comply with the Fair Labor Standards Act, including on minimum wage and overtime rules.

Make informed choices

To make smarter insurance decisions for your business, you’ll need to determine which types of coverage fit your risks and how much protection is appropriate for your operations. An independent insurance broker who isn’t employed by a specific insurance provider can help you evaluate the options. Make sure your broker is familiar with any insurance requirements in your industry. Also talk to us. We can help you evaluate potential coverage gaps and manage business risk cost-effectively.

© 2026

The post What you need to know about business insurance appeared first on KBST&M.

If you give artwork to charity, the deduction you can claim depends on several factors, including the type of organization receiving the piece and how it will be used. Special substantiation and appraisal rules may apply as well.

Relation to charitable function

Your deduction for a donation of art will generally be reduced if the charity’s use of the work is unrelated to the purpose or function that’s the basis for its qualification as a tax-exempt organization. The reduction equals the amount of capital gain you would have realized had you sold the artwork instead of giving it to charity.

For example, let’s say you bought a painting a decade or so ago for $6,000 and now it’s worth $10,000. You contribute it to a dog and cat rescue organization to auction off at its annual fundraiser. Your deduction is limited to $6,000 because the organization’s use of the painting is unrelated to its charitable function and you would have had a $4,000 long-term capital gain had you sold it.

But what if you donate the painting to an art museum for its collection? In this case, your deduction could potentially be the full $10,000.

Other limitations

Your current-year deduction generally will be limited to 20%, 30% or 50% of your adjusted gross income (AGI). The percentage varies depending on the type of organization and whether the deduction had to be reduced because of the unrelated-use rule explained above. The amount not deductible because of a ceiling may be deductible in a later year under carryover rules.

Beginning in 2026, another limitation applies to charitable contribution deductions. Under the new rule, individuals generally may deduct charitable contributions only to the extent their total donations for the year exceed 0.5% of AGI. The rule can reduce the tax benefit of charitable gifts for taxpayers at all income levels, though the dollar impact will be larger for higher-income taxpayers.

Documentation and appraisals

There are substantiation rules when you donate a work of art. First, if you claim a deduction of less than $250, you must get and keep a receipt from the charity or, if impractical to get a receipt, keep a reliable written record for each item you contributed.

If you claim a deduction of at least $250, but not more than $500, you must get and keep an acknowledgment of your contribution from the charity. The acknowledgment must state whether the organization gave you any goods or services in return for your contribution and include a description and good-faith estimate of the value.

If you claim a deduction of more than $500, but not over $5,000, in addition to getting an acknowledgment, you must maintain written records that include information about how and when you obtained the artwork and its cost basis. You must also complete IRS Form 8283, “Noncash Charitable Contributions,” and attach it to your tax return.

If the claimed value of the artwork exceeds $5,000, in addition to an acknowledgment and completing Form 8283, you must have an appraisal of the piece. This appraisal must be done by a qualified appraiser no more than 60 days before the contribution date and meet other requirements. You then include this information on Form 8283.

If your total deduction is $20,000 or more, you must also attach a copy of the signed appraisal. The IRS may request that you provide a photograph. If an item has been appraised at $50,000 or more, you can ask the IRS to issue a “Statement of Value,” which can be used to substantiate the value.

Avoid the unexpected

If you’re considering donating artwork or other valuable property, contact us before making the gift. We can help you calculate your deduction, document the donation properly and avoid unexpected tax issues.

© 2026

The post Consider your potential charitable deduction before donating artwork appeared first on KBST&M.

These days, many people are evaluating recurring expenses and deciding which memberships deserve a place in their budgets. At the same time, members increasingly expect personalized experiences, flexible engagement options and clear value from the organizations they support. If renewals are slowing at your nonprofit, it’s time to strengthen your retention strategy.

Learn what today’s members expect

To keep members, you may have to offer something they need. For example, you could offer education, networking opportunities, research, discounts or credentials. And the only sure way to get a handle on what your members need is to ask them.

You can accomplish this through formal surveys, focus groups and online polls, as well as by simply asking your members when you talk with them. How are your services (and products, if applicable) meeting their needs? What do they need that you’re not providing? Member expectations continue to evolve quickly, especially as technology, workplace trends and communication preferences change. So, check in with members regularly.

Reinforce the impact of membership

Providing the right offerings is important. But you also must emphasize your organization’s value proposition. This is the unique experience your members have when they interact with your nonprofit and its offerings.

Try making an emotional appeal that taps into the intangibles of being part of your group. Depending on your mission, you might tout the value of individuals banding together to create a powerful voice for change, the chance to help improve the conditions in your community or the ability to network with local or industry leaders.

Share measurable outcomes whenever possible. Members are increasingly motivated by seeing how their participation contributes to real-world impact.

Offer flexible and personalized ways to participate

In general, members who are deeply involved will stick with your organization. Create as many avenues as you can for them to participate, for example, as board and committee members, event volunteers, or publication contributors.

Treat members as individuals whenever possible. Always address correspondence to them specifically (never to “member at large”) and consider offering them personalized content when they visit your website. Also, make sure it’s easy to renew membership on your website and that the renewal process supports multi-year memberships — possibly at a discounted rate.

Digital convenience matters more than ever. Members increasingly expect a mobile-friendly renewal process, self-service account management and communication tailored to their interests and participation history.

Use your social media channels to further enhance your communication efforts. Give members a reason to follow you by regularly posting updates, event photos and other engaging content. If your organization is top of mind, members are more likely to stay involved.

Address budget concerns proactively

Even with the most effective retention strategies in place, financial pressures still influence many membership decisions. Rather than ignoring this reality, communicate openly and show members that you understand the competing demands on their budgets.

Some organizations are finding success with installment payment options or tiered memberships. Limited-time incentives can also make renewals more manageable for members.

A bright future

Taking these approaches can help you deepen member loyalty and encourage long-term commitment. Most important, continue to demonstrate the ongoing value and impact of membership. Strong member relationships — built on relevance, flexibility and trust — can help nonprofits sustain engagement well into the future.

© 2026

The post How nonprofits can better engage members and encourage renewals appeared first on KBST&M.

Tax identity theft isn’t limited to individual taxpayers — businesses are also targeted through their Employer Identification Numbers (EINs), payroll systems and tax filings. The financial impact of these crimes can be significant. Businesses may face delayed or stolen tax refunds, unauthorized payroll filings, and the time and expense of resolving IRS issues. There may even be credit damage or, if employee or customer data is compromised, reputational harm. Here’s what you need to know to protect your business.

How tax identity theft happens

Business tax identity theft comes in many forms and can affect sole proprietors, corporations, partnerships and limited liability companies. For example, criminals may file fraudulent returns using a company’s EIN, impersonate executives to steal employee W-2 data, or use forged IRS documents to pose as a business for financial or tax-related activity. In more advanced cases, hackers combine stolen data from breaches with synthetic identities to create entirely fake businesses capable of filing returns and securing credit.

These schemes often go undetected until the IRS rejects a legitimate tax filing or flags duplicate activity. Other warning signs may include rejected extension requests, unexpected IRS transcripts or notices, or missing IRS correspondence.

You also might receive a Letter 5263C or 6042C from the IRS. If your business receives one of these notices, don’t panic — it may stem from an IRS verification issue or a filing inconsistency, such as transposed numbers on your return. But it could signal something more serious. So contact your tax advisor to help answer all the questions in the letter within the timeframe specified in the notice (typically within 30 days). In some cases, the IRS may require you to file Form 14039-B, “Business Identity Theft Affidavit,” to report suspected identity theft.

How to protect your business

Tax identity theft can be costly, so prevention and early detection are critical. Consider the following seven security measures to help protect your business:

1. Prioritize cybersecurity. Your business should have a formal cybersecurity plan that provides a step-by-step approach for detecting identity theft. When breaches happen, your plan should trigger a prompt, thorough response. Review your plan regularly and update it to reflect changes in your business operations and emerging cyber risks.

2. Safeguard sensitive business data. Store employee and customer data, along with other proprietary records, such as financial statements and prior years’ tax returns, in a secure location. Keep your EIN information up to date with the IRS, including the responsible party and contact details. Shred nonessential documents before throwing them out, and limit access to your EIN to parties with whom you initiated the contact. Share sensitive information via the internet or email only if the recipient is trusted (such as your lender or tax preparer) and the site is secure or the email is encrypted.

3. Guard your logins and passwords. Some businesses store account logins and passwords in a single location, which can be convenient but risky. If a dishonest employee or hacker gains access, they could reach sensitive systems, including those tied to your EIN and tax filings. Use strong security controls to protect this information.

4. Use the latest cybersecurity technology. This includes firewalls, antivirus and antimalware software, spam filters, encryption and multi-factor authentication. Also exercise common sense: Don’t download files, click links or open attachments sent from unknown sources. It’s also prudent to back up sensitive data to a secure, external source not connected to your network.

5. Educate employees. Conduct periodic training sessions to remind employees about the latest scams, such as phishing emails that impersonate familiar businesses or colleagues to steal sensitive information. Employees should be aware of your cybersecurity plan and each person’s role if a breach occurs. Also remind them that the IRS doesn’t initiate contact by telephone, email, text or social media to request sensitive information.

6. Monitor business credit reports. It doesn’t take much effort to monitor your company’s profiles from the three major business credit bureaus: Equifax, Experian and TransUnion. Subscribe to their monitoring services and real-time alerts for suspicious activity, which may signal unauthorized accounts or broader identity theft affecting your business.

7. Secure your tax filings and accounts. Work with a trusted tax professional and use secure portals to share tax documents. Review IRS notices promptly and investigate any rejected filings, unexpected transcripts or unusual activity tied to your EIN.

Be proactive, not reactive

No preventive measure is 100% fail-safe, so identifying suspicious activity is also critical. Uncovering identity theft early makes it easier to address.

Contact us if you have questions about protecting your business’s tax filings, employee tax data or IRS account information. We can help you review your risks, implement practical data security measures and determine the next steps if something looks suspicious.

© 2026

The post Tax identity theft: Businesses are at risk, too appeared first on KBST&M.

In the early days, many nonprofits rely on bursts of fundraising activity — short campaigns that bring in funds, followed by long, quiet stretches. But as an organization matures, this stop-and-start approach can limit growth and stability. Shifting to consistent, strategic fundraising helps build momentum, strengthen donor relationships and support long-term goals. Here’s how to make the transition.

Lay the groundwork

The first step to an effective long-term fundraising plan is to form a fundraising committee. This should consist of board members, your executive director and other key staff members. You may also want to include some major donors and active community members.

Your committee should review past funding sources and fundraising approaches — and then weigh the advantages and disadvantages of each. Even if your overall fundraising efforts have been less than successful, some sources and approaches may be worth keeping.

The next step for the committee is to brainstorm new donation sources and methods and select those with the greatest fundraising potential. Its strategy should also outline the roles for board members to play in fundraising efforts. For example, in addition to making their own donations, they can serve as crucial links to corporate and individual supporters.

Turn strategy into action

Once the committee has determined where to seek funds and how to ask for them, it’s time to create a fundraising budget that includes operating expenses, staff costs and volunteer projections. After the strategy and budget have board approval, develop an action plan for achieving each objective and assign tasks to specific individuals.

Don’t let your fundraising plan run on autopilot. Regularly evaluate the plan and be ready to adapt it to organizational changes and unexpected situations. Although you want to give new fundraising initiatives time to succeed, don’t be afraid to cut your losses if it’s obvious an approach isn’t working.

Keep revenue flowing year-round

Waiting until funds run low to launch a campaign can create unnecessary pressure and uncertainty. With a strategic, long-term plan in place, fundraising shifts from a reactive activity to an ongoing strength. Contact us for help reviewing your current fundraising approach and, if needed, transitioning to a more effective one.

© 2026

The post Moving beyond feast-or-famine fundraising for your nonprofit appeared first on KBST&M.

Most business owners would like to offer their employees a 401(k) retirement savings plan with all the bells and whistles. But for small businesses with lean budgets and small staffs, offering such benefits may be out of the question. Fortunately, SEP IRAs and SIMPLE IRAs are less expensive and easier to administer. Might one of these tax-advantaged options work for your workforce?

SEP: Flexible and zero setup fees

Simplified Employee Pension (SEP) IRAs are individual retirement accounts you establish on behalf of each participant. (Self-employed individuals can also establish SEP IRAs.) Participants own their accounts, so they’re immediately 100% vested. If participants decide to leave your company, their account balances go with them. Most people roll their accounts over into a new employer’s qualified plan or traditional IRA account.

SEP IRAs don’t require annual employer contributions. That means you can choose to contribute only when cash flow allows. In addition, there are typically no setup fees for SEP IRAs. But participants generally must pay trading commissions and fund expense ratios (a fee typically set as a percentage of the fund’s average net assets).

In 2026, the SEP IRA annual contribution limit is 25% of a participant’s compensation, up to $72,000. That amount is higher than the standard 401(k) account contribution limit of $24,500 (in 2026). What’s more, employer contributions are tax-deductible. Meanwhile, participants won’t pay taxes on their SEP IRA funds until they’re withdrawn.

However, there are a few downsides to consider. Although participants own their accounts, only employers can make SEP IRA contributions. And if you contribute sparsely or sporadically, participants may see little value in the accounts. Also, unlike many other qualified plans, SEP IRAs don’t permit participants age 50 or over to make additional “catch-up” contributions.

SIMPLE: Easy and participant-friendly

Another possibility is to offer a Savings Incentive Match Plan for Employees (SIMPLE) IRA. As with a SEP IRA, your business creates a SIMPLE IRA for each participant, who’s immediately 100% vested in the account. Unlike SEP IRAs, SIMPLE IRAs allow participants to contribute to their accounts if they choose.

Other advantages of SIMPLE IRAs include:

• They’re relatively easy for employers to set up and administer.
• They don’t require your business to file IRS Form 5500, “Annual Return/Report of Employee Benefit Plan.”
• You don’t need to submit the plan to nondiscrimination testing.
• Participants pay no setup fees and enjoy tax-deferred growth on their account funds.
• Participants can contribute up to $17,000 annually in 2026.
• Participants age 50 or over can make catch-up contributions of up to $4,000 in 2026 ($5,250 for those ages 60 to 63).

Participants can contribute more to a SIMPLE IRA than to a self-owned traditional or Roth IRA. But SIMPLE IRA contribution limits are lower than limits for 401(k)s. Also, because contributions are made with pretax dollars, participants can’t deduct them. They also can’t take out plan loans. Then again, making pretax contributions does lower their taxable income. Perhaps most important is that employer contributions to SIMPLE IRAs are mandatory, regardless of your cash-flow situation. However, in general, you can deduct contributions as a business expense.

SIMPLE Roth IRAs are available, too. Ask your financial and employee benefits advisors whether this might be a better option for your business.

Lower-cost options

If you’ve thought you can’t afford to offer workers a retirement plan, think again. In addition to SEP and SIMPLE IRAs, there are now some lower-cost 401(k) options available as well. We can review your budget, tax situation and benefit needs and suggest how best to proceed. Contact us.

© 2026

The post 2 retirement plans for small businesses with lean budgets appeared first on KBST&M.

Many taxpayers discover at filing time that their tax payments during the year didn’t align with their actual liability — either too much or too little was withheld from their paychecks. A small difference is to be expected, but withholding that’s significantly off target can have negative consequences. Overwithholding reduces the amount available to you throughout the year. Substantial underwithholding can lead to a large balance due, along with potential interest and penalties.

If you received a large refund or owed a lot of tax when you filed your 2025 return, it’s a good idea to take a closer look at how much tax is being withheld from your income this year. Reviewing and fine-tuning your withholding now can help you better align your payments with your 2026 tax liability.

Review your income and withholding

If all or most of your income is from wages, whether from a salary or hourly pay, your employer withholds amounts from your paychecks intended to cover your annual income tax liability. However, these withholding amounts are estimates based on IRS withholding tables, which approximate a typical worker’s annual tax liability at your compensation level.

Your situation may differ from that of a comparably compensated worker for various reasons. You might have larger deductions or credits than is typical, which could make standard withholding too high. Or you might have additional income from other sources, which could make standard withholding too low.

Adjust your withholding if needed

One way to minimize overpayments or underpayments is to estimate your tax liability for the year. Then, if necessary, adjust your withholding by completing a new Form W-4, “Employee’s Withholding Certificate.”

The IRS’s Tax Withholding Estimator can help. It now reflects key provisions of the One Big Beautiful Bill Act (OBBBA), including the elimination of taxes on qualified tips and qualified overtime (up to applicable limits), as well as new deductions for seniors and auto loan interest. It also more accurately accounts for OBBBA changes to tax breaks related to families, homeownership and charitable giving.

Once you submit a new Form W-4 to your employer, changes typically will take a few weeks to go into effect. Keep that in mind when you determine your adjustments.

Revisit withholding after life changes

Changes during the year can affect the accuracy of your withholding. Review your Form W-4 and consider making adjustments if you:

• Experience a significant increase or decrease in income,
• Get married or divorced,
• Have a child or add a dependent,
• Buy a home, or
• Receive new sources of income not subject to withholding.

Even if you’ve already adjusted your withholding, reviewing it again after a major life event can help you stay on track.

Use withholding strategically

If part of your income isn’t subject to withholding, estimated tax payments may also come into play. You can avoid penalties for missing or underpaying an estimated payment by increasing your withholding to make up the difference. Unlike estimated tax payments, withholding amounts are treated as paid evenly throughout the year — regardless of when they’re actually withheld.

Using this strategy, you can increase withholding from your wages (or from your spouse’s, if you’re married). Alternatively, if you’re retired and don’t have wages from which to withhold taxes, increasing withholding from your IRA or other retirement plan distributions may be possible.

Find the right balance

Keeping your withholding aligned with your expected tax liability can help you enjoy better cash flow during the year and avoid surprises at filing time. We can review your current withholding (and estimated tax payments, if applicable), project your tax liability for the year and assist with deciding whether to make any withholding changes for 2026.

© 2026

The post Fine-tune your tax withholding after filing your return appeared first on KBST&M.

Businesses that own commercial real property may be sitting on an overlooked treasure chest of tax savings — and a cost segregation study can be the key to unlocking it. This is a strategic tool that combines accounting and engineering techniques to identify building costs that are properly allocable to tangible personal property rather than real property. A cost segregation study may allow you to accelerate depreciation deductions on certain items, thereby deferring taxes and boosting cash flow.

Timing counts when depreciating assets

Commercial rental properties and buildings used for business purposes are generally depreciated over 39 years under federal tax law. But such properties may include a wide range of components with much shorter depreciation recovery periods. These can include parts of various systems such as HVAC, plumbing, electrical, fire protection, alarm and security, as well as:

• Drywall,
• Doors,
• Fixtures,
• Data and communication ports,
• Flooring, and
• Cabinetry.

These assets could have useful lives of five, seven or 15 years — all significantly less than 39 years. By segregating such assets, you can claim greater depreciation deductions sooner. You’ll claim the same total amount of depreciation on the assets over time but reduce your tax bill in the short term, providing greater cash flow.

OBBBA changes add value

Recent tax law changes under the One Big Beautiful Bill Act (OBBBA) enhanced these benefits by increasing first-year depreciation write-offs. The two most widely relevant provisions relate to:

1. Bonus depreciation. The OBBBA restored 100% first-year bonus depreciation deductions for eligible assets acquired and placed in service after January 19, 2025. While commercial real properties aren’t eligible for first-year bonus depreciation, segregated building components with shorter recovery periods may be eligible. There are no phaseout limits for bonus depreciation, which is helpful for larger companies.

2. Section 179 expensing. For tax years beginning in 2025, the OBBBA increased the maximum amount of eligible assets you can immediately deduct under the Sec. 179 expensing election to $2.5 million. A phaseout reduces the maximum Sec. 179 deduction if, during the year, you place in service eligible assets in excess of $4 million. Both figures are adjusted annually for inflation. For 2026, they’re $2.56 million and $4.09 million, respectively. Again, commercial real properties aren’t eligible for Sec. 179 expensing, but segregated building components with shorter recovery periods may be eligible.

Additionally, if your business involves manufacturing or certain agricultural activities, you may be eligible for a new depreciation-related tax break. The OBBBA introduced a 100% deduction for the cost of qualified production property (QPP). To be eligible, among other requirements, a qualifying real property’s construction must begin after January 19, 2025, and before January 1, 2029, and it must be placed in service before 2031. This break allows eligible businesses to immediately deduct the cost of QPP that otherwise would be depreciable over 39 years.

The QPP deduction makes cost segregation studies less relevant for qualifying property. But it’s subject to several specific requirements and exceptions that may prevent you from claiming it.

Ready, set, save

A cost segregation study can significantly lower your taxes, but it isn’t a do-it-yourself project. Although this strategy has been consistently upheld in the courts, the IRS closely monitors deductions based on cost segregation studies. And the rules can be confusing.

So, it’s prudent to hire experienced professionals to help you identify various building components and break down write-off periods for them. Contact us to discuss whether a cost segregation study could potentially save you taxes. We can determine reasonable cost allocations to help withstand IRS scrutiny.

© 2026

The post Cost segregation studies can reveal substantial tax savings appeared first on KBST&M.