How to Set Remote Teams Up for Success
As remote work continues to evolve, businesses must adapt to this new way of working. What was once a temporary solution during the global pandemic has now become a permanent part of the modern workforce. While the flexibility of remote work offers numerous benefits, it also presents challenges. This can be particularly true when it comes to maintaining accountability.
Let’s take a look at how businesses can set their remote teams up for success, ensuring productivity and collaboration.
Start with Clear Priorities
A common mistake when shifting to remote work is expecting immediate high productivity. While remote teams can be incredibly efficient, the transition needs to be handled with care. Instead of demanding an overwhelming output right away, businesses should prioritize tasks.
Just like workers who come to the office, remote staff members also experience the pressures of modern life. Whether it’s balancing family life or managing stress, it’s important to give employees space to adjust. Clear priorities and realistic goals will go a long way toward ensuring that remote workers remain focused and motivated.
Shift Your Mindset
One misconception that many businesses still hold is that remote work is a temporary fix. At this point in time, it is clear that this mindset is no longer accurate. Remote work is now an integral part of many businesses and is likely to stay in some capacity for the foreseeable future.
With the potential for future global disruptions, remote work should likely be a permanent part of your workforce strategy. Teams that are well-versed in remote collaboration will be ready for challenges and better equipped to handle whatever the future may bring.
The Right Tools Matter
A major barrier to effective remote work is access to the right tools. While businesses should already have approved software for collaboration and communication, it’s also important to remain open to new tools and technologies that may come along that can improve productivity.
The pace of innovation in software and collaboration tools is rapid. There are more options than ever, and that means that sticking to outdated or restrictive tools can hold teams back. If a new app or platform could streamline communication or boost productivity, don’t hesitate to adopt it.
Focus on Results, Not Hours
Traditional work hours often revolve around fixed schedules and often high degrees of micromanagement. However, remote work demands a shift in mindset. Instead of focusing on when your employees are working, concentrate on the results they produce. Trust your team to manage their time wisely and focus on the work that needs to be done.
Daily check-ins or regular team meetings are essential for maintaining alignment and communication. However, the focus should be on outcomes rather than micromanaging employees’ time. This will lead to a happier and more satisfied workforce.
Copyright: Business Brokerage Press, Inc.
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Arizona Tax Tips for Selling Your Business
Arizona Tax Tips for Selling Your Business
Selling a business in Arizona isn’t just about signing papers. It’s a big step, filled with decisions that affect your money, your future, and your peace of mind. Whether you’re cashing out to enjoy the dry heat in a new boat or RV, or planning a new business venture in the Valley, knowing your tax stuff ahead of time can save you big headaches.
This article covers key points like capital gains tax, depreciation recapture (when you have to pay back some tax savings), and other things that can affect your finances. If you have any questions, feel free to contact us.
Capital Gains: What You Really Pocket
When you sell your business, the IRS may want a piece of your profit. But if you’ve owned the business for over a year, there’s good news: you might qualify for long-term capital gains tax rates. These rates are usually lower than your regular income tax, which means you could keep more of your money. Think of it like getting a hometown discount on taxes, kind of like catching a deal during the off-season in Tucson. The longer you’ve held on, the better your chances for a lower tax bill.
It’s important to know what counts as a “gain.” This is the amount you make after subtracting what you originally invested and any improvements you paid for. So if you bought your business for $100,000 and sell it for $300,000, you’ve got $200,000 in capital gains. Depending on how the sale is structured, parts of that gain might be taxed differently. Planning ahead and working with a tax advisor can help you lower what you owe, and pocket more of what you’ve earned.
Watch Out for Depreciation Recapture
When you sell your business, you’re not just selling the big stuff like your building or company name. You’re also selling things like equipment, furniture, or machines you’ve used over the years. If you claimed tax write-offs for those items through depreciation, the IRS might come calling to collect a portion of those savings. That’s what they call depreciation recapture.
Here’s how it works. Let’s say you bought a truck for your business and wrote off its value over several years. When you sell that truck, any money you get for it above its written-down value may be taxed at your regular income rate, not the lower capital gains rate. That can add up quickly and catch people off guard if they’re not expecting it.
The best move is to plan for this early. Talk with your tax advisor about what assets you’ve depreciated and how a sale might affect your taxes. It’s better to build it into your strategy now than to get hit with a surprise tax bill later, especially when you’re already juggling a major financial move.
Net Investment Income Tax (NIIT)
If your business sale brings in a big profit and pushes your total income past a certain limit, you could owe an extra 3.8% tax on top of everything else. This extra charge is called the Net Investment Income Tax, or NIIT. It’s like a sneaky heatwave that shows up just when you thought you were in the clear. A lot of business owners don’t see it coming until it’s too late.
NIIT usually applies when your modified adjusted gross income goes above $200,000 for individuals or $250,000 for married couples filing jointly. It affects things like capital gains, rental income, and dividends, basically, the extra money you make beyond your regular paycheck. Selling a business can easily tip you over that line.
To stay ahead of it, talk with your CPA before you close the deal. You might be able to structure the sale differently, spread income over a few years, or take other steps to reduce the impact. A little planning now can save you from a tax surprise later, especially if your financial summer is already heating up.
State & Local Arizona Taxes
When you sell a business in Arizona, you need to do more than just think about federal taxes. Arizona has its own tax twist called the Transaction Privilege Tax, or TPT. Unlike a typical sales tax that’s charged to the buyer, TPT is actually a tax on the seller for the privilege of doing business in the state. That means if you’re selling a business, especially one that’s been earning income in Arizona, the state wants a cut.
TPT rates can vary depending on your city and the kind of business you ran. Cities like Tucson, Mesa, and Chandler may have different rules or add-on taxes that apply on top of the state rate. If you’re not careful, you could end up with unexpected bills from multiple levels of government.
Before you make the sale final, check with a local tax expert who understands the TPT rules in your area. They can help you register, file the right paperwork, and avoid penalties. It’s one of those things that’s easy to miss, but just like Arizona summer heat, it can burn you if you’re not ready.
Installment Sales: Take It Slow
Selling your business doesn’t always mean getting a big check all at once. In fact, sometimes it’s smarter to go the slow-and-steady route. That’s where an installment sale comes in. It lets the buyer pay you over time, maybe over a few years, instead of everything upfront. You still get the full sale price, just in smaller pieces.
The big benefit? You only pay taxes on the money you receive each year. So instead of taking a huge tax hit in one year, your income, and your tax bill, can be spread out. This can help keep you in a lower tax bracket and give you more control over your cash flow. It’s kind of like sipping a raspado on a hot day instead of chugging it all at once.
But installment sales do come with a few things to think about, like interest, default risk, and how it fits into your long-term plans. A tax advisor or financial planner can help you decide if this approach makes sense for your situation.
QSBS & Section 1202: Big Breaks for Small Biz
If you started a small business and stuck with it for a while, you might be in for a huge tax break. Section 1202 of the tax code offers something called the Qualified Small Business Stock (QSBS) exclusion. If your company meets the right requirements, you could exclude up to 100% of the capital gains from your federal taxes when you sell your shares. That’s right, some or even all of your profit could be completely tax-free.
To qualify, your business needs to be a C corporation, and you must have held your shares for at least five years. There are also limits on the size of the company and the kind of work it does. Not every business fits the mold, but if yours does, this rule can save you tens or even hundreds of thousands of dollars.
The tricky part is making sure all the boxes are checked. If you think your company might qualify, talk with a tax pro who understands QSBS rules. A little paperwork and planning now can lead to a massive payoff when it’s time to sell.
Consider an ESOP
If you’re thinking about stepping away from your business but still want to see it thrive, an Employee Stock Ownership Plan (ESOP) might be the perfect path. With an ESOP, you sell your business (gradually) to your employees. They become the new owners over time, and you get to walk away knowing the company is in familiar hands.
Beyond preserving your business legacy, ESOPs come with solid tax advantages. You may be able to defer or reduce capital gains taxes, and in some cases, the business itself can enjoy ongoing tax savings. It’s a win-win, your team gets a stake in the company’s future, and you get financial benefits as you transition out.
Setting up an ESOP isn’t something you can do overnight. There are rules to follow and paperwork to handle, so it’s smart to work with professionals who’ve done it before. But if you care about your team and want a tax-savvy exit strategy, this could be the way to go.
Estate Tax Angle
Selling your business can bring in a big payday—but it might also raise the value of your estate more than you realize. If your total assets, including the proceeds from the sale, exceed certain federal limits, your heirs could face a hefty estate tax bill down the road. That’s a tough way for your family to remember your hard-earned success.
The good news is, you’ve got options. One smart move is to start gifting shares of your business before the sale happens. This can gradually reduce the size of your estate while also helping family members or future owners get involved early. Another option is setting up a trust, which can give you more control over how assets are handled after you’re gone.
If your business includes high-value property like land in Scottsdale, 55+ retirement developments, or commercial real estate in the East Valley, it’s especially important to plan ahead. An estate planning pro can help you create a strategy that protects both your legacy and your loved ones from surprise tax burdens.
Final Tip: Get Local Help
Selling a business in Arizona isn’t just about crunching numbers—it’s about understanding the local landscape. The state has its own tax rules, filing requirements, and little surprises that can throw a wrench in your plans if you’re not prepared. From unique zoning issues to quirks like swampboxes, flood irrigation, and even city-specific TPT filings, you’ll want someone in your corner who’s seen it all before.
That’s why it’s worth teaming up with an Arizona-based advisor. They don’t just understand the federal tax code—they know how things work right here, from Flagstaff to the East Valley to the outskirts of Yuma. Whether it’s dealing with property values, regional incentives, or state tax deadlines, they can guide you through it without the guesswork.
At the end of the day, local knowledge matters. A trusted advisor who knows both the Arizona business scene and I-10 traffic patterns is exactly who you want helping you close the deal cleanly, confidently, and without unnecessary tax headaches.
FAQs
What are the tax implications of selling a business?
When you sell a business, you’ll likely owe taxes on the profit you make, and the amount depends on a few key factors. The biggest one is how long you owned the business. If you’ve owned it for more than a year, your profit may qualify for long-term capital gains tax rates, which are usually lower than regular income tax rates.
If you’ve owned it for less than a year, it might be taxed as ordinary income, which could be a higher rate. Other parts of the sale, like equipment or property you depreciated, may trigger depreciation recapture, which is taxed differently. Depending on how much you make from the sale, you could also be hit with additional taxes like the Net Investment Income Tax. All of this adds up, so it’s smart to plan ahead with a tax professional who can help you understand your full tax picture and find ways to reduce what you owe.
What is the capital gains tax rate for selling a business?
The capital gains tax rate you’ll pay when selling a business depends on how long you’ve owned it and your overall income. If you’ve owned the business for more than one year, your profits are usually considered long-term capital gains, which are taxed at lower rates, typically 0%, 15%, or 20% depending on your income level.
If you’ve owned the business for less than a year, the profits are considered short-term capital gains and are taxed at your regular income tax rate, which can be significantly higher. These rates can make a big difference in how much you end up keeping after the sale. That’s why holding your business for at least a year before selling it can lead to major tax savings.
Are there tax deductions or exemptions when selling a business?
Yes, there are several tax deductions and exemptions that can help reduce the amount you owe when selling a business. One common strategy is to offset your capital gains with capital losses from other investments, which can lower your overall taxable profit. There are also special provisions in the tax code that can offer major benefits, like the Qualified Small Business Stock (QSBS) exclusion under Section 1202.
If you meet the requirements, this rule could allow you to exclude up to 100% of your capital gains from federal taxes. In addition, you may be able to deduct certain selling expenses, legal fees, or investment advisory costs related to the sale. These opportunities can add up quickly, so it’s a good idea to work with a tax professional who can help you navigate your options and take full advantage of what’s available.
Is there a difference between selling assets and selling the whole business?
Yes, and the difference can have a big impact on your taxes. When you sell individual assets—like equipment, inventory, or real estate—each item may be taxed differently based on how it was used and whether it was depreciated. Some assets may trigger capital gains taxes, while others could result in ordinary income due to depreciation recapture.
On the other hand, selling the entire business, especially if it’s structured as a stock sale, may be taxed more simply as a single capital gain. Buyers often prefer asset sales because they can write off the purchased assets more easily, while sellers may favor stock or entity sales for better tax treatment and fewer complications. Understanding the tax consequences of each option is key, so it’s smart to review your situation with an accountant or tax advisor before making a deal.
How can you lower the tax impact of selling a business?
There are several strategies you can use to reduce the tax burden when selling a business. One option is to structure the deal as an installment sale, which spreads your income (and the related taxes) over multiple years instead of taking the full hit all at once. This can help keep you in a lower tax bracket year over year. You might also qualify for special tax breaks like the QSBS exclusion under Section 1202, which can wipe out a large portion of your capital gains if your business meets certain requirements.
Don’t forget about deducting expenses related to the sale, like legal or advisory fees. You can also offset gains by using losses from other investments. The right combination of these tactics depends on your business structure, how long you’ve owned it, and your broader financial picture. A tax expert can help you build a custom plan to minimize what you owe and maximize what you keep.
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The Power of Employee Engagement: Why It Matters for Your Business
Your employees are more than just part of your team. Employees are the driving force behind your business’s success. If you want your company to thrive, the happiness and satisfaction of your employees should be a top priority. An unhappy workforce can lead to negative energy that makes its way into customer interactions. Ultimately, your bottom line may begin to suffer. Investing time and effort into creating a positive workplace environment will pay off in many ways.
Hiring the Right Fit
The foundation of employee satisfaction starts with your hiring process. When bringing on a new team member, you’re starting a relationship that will impact your company in many ways.
It’s important to write job descriptions that accurately reflect the role and make the position attractive to the right candidates. It’s also crucial that anyone involved in hiring is trained to follow best practices. This will ensure a smooth and professional recruitment process. They will be the first person your new employees will encounter, and that means that they set the tone from day one.
How to Keep Employees Engaged and Happy
Once you’ve built your team, it’s essential to actively think about their satisfaction. Never just assume that employees will naturally stay motivated or invested in their work. It’s your responsibility to ensure they feel valued, appreciated, and driven to contribute.
Here are some actionable steps you can take:
- Provide competitive salaries and benefits
- Recognize their achievements
- Offer rewards like bonuses or public recognition
- Give employees time off for birthdays and vacations
- Seek employee feedback
- Offer opportunities for career growth
- Encourage relationships among your staff members
When employees are happy and engaged, their positivity will positively impact customers. Satisfied employees not only tend to stay with the company longer, but they also become more motivated. This will lead to increased productivity and a stronger bottom line.
Copyright: Business Brokerage Press, Inc.
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The Critical Role of Confidentiality in Business Sales
When it comes time to sell a business, ensuring confidentiality should always be the top priority. A breach of confidentiality is one of the quickest ways to undermine a business sale. Once this trust is broken, it can be incredibly difficult to contain or fix the resulting damage. This rule applies universally, regardless of the type of business or industry.
Experienced attorneys, accountants, business brokers and M&A advisors all prioritize maintaining confidentiality for good reason. A single lapse can have far-reaching consequences, potentially devastating a business or severely affecting its market value. Even if a breach doesn’t lead to complete destruction, it can tarnish the company’s reputation and significantly reduce its worth.
The risks that arise once news of a sale becomes public are substantial. Key employees, customers, and suppliers may begin to look for alternatives, assuming that the sale will lead to disruptions. The loss of even one key person or relationship can end up destabilizing the business. Employees might start to worry about their future within the company and begin seeking other job opportunities. In the worst-case scenario, they may take their expertise to a competitor, weakening your business in the process.
Another issue that can arise is that management-level employees, whose experience is critical to the company’s operations, might leave. Of course, it goes without saying that this issue likely will create a gap that is difficult to fill, especially if you’re trying to do it quickly. Similarly, valuable customers and suppliers could seek more stable alternatives. These changes can have an immediate negative effect on the company’s bottom line and cause its value to decrease.
Perhaps even more worrisome is the risk posed by competitors. If your competitors learn that your business is for sale, they might not hesitate to share this information with your customers and suppliers, further tarnishing your market position. They may even intensify their efforts to win over your clients.
It cannot be underestimated why confidentiality is so important to the sale process. A breach can undermine your ability to close the deal successfully. Experienced business brokers and M&A advisors are trained to protect confidentiality at every stage of the sale. They go beyond simply having potential buyers sign non-disclosure agreements. They also carefully vet buyers to ensure they are genuinely interested, not just collecting information or “window shopping.”
By working with qualified brokerage professionals, you gain an added layer of protection for your business’s confidentiality. Ensuring that only serious buyers are involved in the process helps to safeguard the value and reputation of your business. The complexities of selling a business are many, but protecting confidentiality remains the most fundamental step in achieving a successful sale.
Copyright: Business Brokerage Press, Inc.
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The Essential Role of Corporate Social Responsibility
If you’re not entirely familiar with Corporate Social Responsibility (CSR), you are not alone. While this word is getting used more and more often, many people are still not familiar with the concept. Yet, CSR has become a critical focus for businesses of all sizes. As a result, understanding its key elements is essential for staying competitive in today’s market. Let’s explore the main pillars of CSR and why they should matter to you.
CSR is built around four key pillars: the community, the environment, the marketplace, and the workplace. Each pillar represents a different area of responsibility that a company should focus on to be considered socially responsible.
Community
This pillar refers to a company’s efforts to give back to the local or global community. This could involve financial donations, volunteering time, or other forms of involvement. Companies that engage with their communities foster goodwill and demonstrate that they care about improving society.
Environment
As environmental concerns continue to grow, consumers are increasingly looking for businesses that prioritize sustainability. Whether it’s through recycling, using eco-friendly packaging, or adopting greener practices, companies that reduce their environmental impact can build trust and appeal to environmentally-conscious customers.
Marketplace
The marketplace pillar involves ethical business practices. This includes fair treatment of customers, suppliers, and employees. CSR encourages companies to be transparent in their marketing, uphold honesty in advertising, and reject exploitative practices.
Workplace
The final pillar of CSR focuses on ensuring fair and equitable treatment within the workplace. This includes adhering to labor standards, prioritizing safety, and fostering diversity and equal opportunity. When they offer a supportive and inclusive environment, businesses build a stronger workforce.
Why CSR Matters for Buying and Selling Businesses
In today’s competitive business environment, adopting corporate social responsibility (CSR) practices is not just an ethical choice—it’s a strategic one. Embracing CSR can enhance your company’s value, attract shareholder interest, and increase its appeal to potential buyers. Additionally, CSR initiatives foster stronger community relations, improve employee satisfaction, and promote ethical business operations
For sellers, understanding the importance of CSR can help you position your business as an appealing acquisition target. Buyers are looking for companies that align with current and future market trends, offer strong customer loyalty, and maintain positive relationships with suppliers and employees. They’re also keen to avoid companies with unresolved issues or baggage. By incorporating CSR into your business practices, you can address these concerns and increase your business’s appeal to potential buyers.
Copyright: Business Brokerage Press, Inc.
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