Category: News and Events

The middle of the year is one of the best times to look at your business taxes. It’s when you have enough real-world results to see where revenue, payroll, and expenses are heading but there is still time to make thoughtful adjustments before the fourth quarter.

A mid-year checkup is not a miniature tax-season scramble. It is a planning conversation. Ask:

• Are your estimated payments keeping pace with your income?
• Have changes in your team, ownership, or spending created new tax questions?
• Could upcoming purchases or investments affect cash flow or deductions?

Reviewing these items now can make year-end decisions more deliberate and filing season less surprising.

Update Your Income and Cash-Flow Projection

Start with what has happened through the first half of the year, then build a reasonable projection for the remaining months. Compare year-to-date revenue, gross profit, operating expenses, and owner activity with your budget and prior-year results. A strong new contract, a delayed customer payment, an unexpected expense, or a slower season can all change the tax picture.

The goal is not to predict the exact December 31 result. It is to develop a working estimate that can guide tax payments, hiring, distributions, and purchases. Look at cash flow alongside taxable income; a profitable business can still be short on cash when receivables, inventory, or expansion costs absorb the money.

Recalculate Estimated Tax Payments

Estimated payments based on last year’s results may no longer be accurate. The IRS calculation considers expected income, deductions, and credits, and the correct payment method depends on how your business is taxed. Sole proprietors, partners, and S corporation shareholders generally make individual estimated payments, while C corporations follow corporate rules.

If results are ahead of plan, an increase may help reduce underpayment exposure. If business has slowed, or deductions have increased, the next payment may need to be reconsidered. For calendar-year individual taxpayers, the third installment generally falls in September, making a review before Q4 especially useful.

Confirm Payroll Deposits and Filings

Use the mid-year review as a quick payroll compliance check:

• Review the federal deposit rules, then confirm that deposits, quarterly returns, and payroll records agree.
• Check state and local obligations if you have hired employees, changed work locations, or added remote staff.
• For Pennsylvania employees, verify residency for local earned income tax and local services tax responsibilities.

Discrepancies are easier to fix now rather than later.

Review Deductions and Credits While There Is Time to Act

A mid-year review can uncover expenses that are missing from the books or sitting in the wrong category. Use this time to:

• Reconcile bank and credit card accounts.
• Gather receipts and other supporting records.
• Document the business purpose of travel, vehicle, professional, technology, and other costs.

In general, deductible business expenses must be ordinary and necessary, but the timing and treatment can vary. Good records give your CPA a clearer picture and help support your return.

Credits are worth reviewing separately because they reduce tax differently from deductions. Depending on your business, opportunities may include conducting qualified research, starting a retirement plan, hiring, or other activities. Some credits require specific documentation, elections, or action before year-end. Identifying a potential credit in August is more useful than discovering it after the qualifying window has closed.

Revisit Entity Structure and Owner Compensation

The structure you chose when the company was formed may still fit, but growth, new owners, or new long-term plans can justify another look. Your business structure affects how income is reported, how owners are paid, and which returns are filed. Reviewing it now gives you time to weigh tax, legal, administrative, and cash-flow consequences before next year.

Owner compensation should be part of that discussion. For example, an S corporation generally must pay a shareholder-employee reasonable compensation for services before making non-wage distributions. Review salary, distributions, benefits, and reimbursements together. If an adjustment is appropriate, spreading it across the remaining payrolls is usually easier than a December correction.

Discuss Equipment and Software Before You Buy

If equipment, vehicles, computers, or software are on the Q4 wish list, bring those plans into the tax discussion before signing a contract. Start with the business need and cash-flow impact, then consider the tax treatment. Depreciation generally begins when qualifying property is placed in service.

Under current federal law, certain qualified property acquired and placed in service after January 19, 2025, may be eligible for 100% additional first-year depreciation. Section 179 may offer another path for eligible purchases, including some off-the-shelf software. Cloud subscriptions, implementation work, and customized systems can be treated differently, so share the proposal and expected go-live date with your CPA. Tax timing should support the business decision.

Turn the Review into a Q4 Action Plan

A useful checkup should end with clear next steps:

• An updated income and cash-flow projection
• Revised estimated payments, if needed
• Payroll items to correct and records to gather
• Major decisions that require follow-up

Assign an owner and deadline to each task so you enter Q4 with fewer unknowns, better cash-flow visibility, and time to act.

Planning Ahead? Let’s Talk It Through

Tax planning works best alongside the decisions that shape your business. Our CPA and Payroll teams can help review year-to-date results, payment schedules, owner compensation, and upcoming investments before the year-end rush begins.

Have questions? We are happy to talk. Contact us online or call 215-723-4881.

The IRS has announced a midyear increase to the standard business mileage rate, raising it from 72.5 cents per mile to 76 cents per mile, effective July 1, 2026.

The IRS also increased the standard mileage rate for eligible medical and moving purposes from 20.5 cents to 23.5 cents per mile, effective July 1. The charitable mileage rate remains unchanged at 14 cents per mile.

These changes were made in response to recent increases in fuel prices.

For business travel that occurred between January 1 and June 30, 2026, the previous rate of 72.5 cents per mile still applies. The new 76-cent rate applies to qualifying business mileage beginning July 1.

Questions? We are here to help. Call 215-723-4881 or contact us online.

Trump Accounts are a new type of savings account for children with a contribution start date of July 4, 2026. Here’s an overview of the key details families should understand about how these accounts work and who qualifies.

While elections to establish a Trump Account may be made before July 4, 2026, contributions generally cannot begin until that date. This applies to both ordinary contributions and the $1,000 federal pilot program contribution. The pilot contribution is made only after a valid election is processed and the child’s Trump Account has been opened.

Who Is Eligible for a Trump Account?

A child may be eligible for a Trump Account if they meet the definition of an “eligible individual” under IRC §530A(b)(2). In practical terms, the child generally must:

• be under age 18 at the end of the calendar year in which the election is made;
• have a Social Security number issued before the election date;
• have an election made either by the Secretary or by another authorized person; and
• not already have had a prior Trump Account election made on their behalf.

IRS guidance further explains that, for 2026 elections, this generally means a child born after December 31, 2008, may qualify for an initial Trump Account if the Social Security number requirement is met.

Who Can Contribute?

During the growth period, contributions may come from several sources, including:

• the federal $1,000 pilot-program contribution;
• qualified general contributions funded by governments or §501(c)(3) organizations;
• employer contributions under IRC §128;
• qualified rollover contributions from another Trump Account for the same child; and
• other contributors, such as the child, parents, relatives, or any other person.

Ordinary contributions and employer contributions are generally subject to a combined $5,000 annual limit during the growth period, indexed after 2027.

The federal pilot program contribution, qualified general contributions, and qualified rollover contributions do not count against the $5,000 cap.

Separate Eligibility for the $1,000 Pilot-Program Contribution

It’s important to note that eligibility for a Trump Account itself is broader than eligibility for the federal $1,000 seed contribution.

For the pilot contribution under IRC §6434, the child must generally:

• be a qualifying child under IRC §152(c) of the person making the election;
• be born after December 31, 2024 and before January 1, 2029;
• be a U.S. citizen;
• have a Social Security number issued before the election; and
• not have had a prior pilot-program election processed.

The pilot contribution is paid only into an established Trump Account. If the child does not have an account, no cash refund is paid outside of the account.

How Elections Are Made

Although contributions cannot begin until July 4, 2026, elections to establish the account and request the pilot contribution may be made earlier on Form 4547, including with a 2025 tax return, or later through the IRS online process when available.

The Short Version

Contributions begin July 4, 2026. A Trump Account can generally be opened for a child under age 18 with a Social Security number and no prior Trump Account election. The separate $1,000 federal contribution is more limited and generally applies to U.S.-citizen children born in 2025 through 2028 who also meet the qualifying-child and Social Security number requirements.

Additional information about setting up these accounts is available on the official website.

If you have questions about how these rules may apply to your family or specific situation, please feel free to contact us.

The City of Philadelphia has once again reduced its wage tax rates, with the new rates taking effect July 1, 2026.

The updated rates are:

• Philadelphia residents: 3.735%
• Philadelphia nonresidents: 3.425%

Any paycheck issued after June 30, 2026, should have the Philadelphia Wage Tax withheld using the updated resident or nonresident rate, as applicable.

The City has also updated its earnings tax rates to match the new wage tax rates. These reductions are part of Philadelphia’s five-year gradual tax-cut plan.

As a reminder, the net profits tax and school income tax follow the same rate-reduction schedule, but those changes don’t take effect until January 1, 2027.

What to Do Now

For taxes that apply to you or your employees, take a moment to review your payroll withholding setup and confirm the correct rates are being applied. Doing so now can help you avoid withholding errors and related payroll issues down the line.

If you have questions about how these changes affect your payroll, please contact us. We’re happy to help.

Practical Apps That Help Businesses Work Smarter

Any small business owner will tell you there simply aren’t enough hours in the day. We hear this when talking with business owners across the region. No matter the industry, the challenge isn’t the core work of the business: it’s the small operational tasks.

A contractor might start the morning by returning a customer call, sending a few invoices before lunch, and then lose fifteen minutes digging through email trying to find the latest version of a proposal. None of these tasks is especially difficult, but together they can take up a surprising amount of time.

That’s where the right technology can make a real difference.

Many small businesses don’t need complicated systems or a massive software stack. A handful of practical tools can remove a lot of the small administrative friction that slows a business down. The goal isn’t adding more technology. It’s making everyday operations run more smoothly.

In Practice: What a Small Business Tech Stack Often Looks Like

A lot of small businesses don’t rely on one all-in-one system. Instead, they use a few tools that each solve a specific problem.

For example, a service company might use a CRM to track customer inquiries, a payment platform to send invoices, cloud storage to manage contracts, and a task management tool to organize work across the team. Working together, these tools can eliminate a surprising amount of day-to-day administrative work.

We’ve seen this in the field. When businesses begin organizing their operations more intentionally, small improvements (better scheduling, clearer records, easier document access) can quickly add up to meaningful time savings.

Cloud Accounting Tools That Support Your CPA

Financial software has changed dramatically over the past decade. Not long ago, accounting files lived on a single computer and had to be emailed back and forth between a business owner and their accountant. Anyone who managed finances that way remembers how easy it was to lose track of the “latest version” of a file.

Cloud accounting systems have changed that dynamic for most businesses.

Platforms such as QuickBooks Online and Xero allow financial information to be stored securely online, where both the business owner and their CPA can access it when needed. Transactions sync from bank accounts, expenses are categorized automatically, and reports can be generated quickly.

What these tools do not replace is professional accounting guidance. Instead, they work more like shared workspaces. The software keeps the records organized, while your CPA reviews the numbers, ensures compliance, and helps interpret what the data actually means for the business.

Customer Relationship Management (CRM)

We often see small businesses storing customer information in four or five different places at once. An email thread here, a spreadsheet there, maybe a few notes in someone’s phone. Most businesses don’t notice how scattered that information is until they try to find something quickly.

A CRM brings that information together in one place.

Tools including HubSpot CRM and Zoho CRM allow businesses to track leads, store contact information, and record past conversations with customers. For service businesses, this is one of the simplest improvements they can make. When a client calls or emails, the full history of the relationship is already there.

That small change alone often saves time and avoids a lot of repeated conversations.

Payment and Billing Platforms

Getting paid quickly matters, especially for small businesses managing cash flow. After all, even a profitable business can run into problems if payments are delayed.

Digital payment systems make the process easier for both businesses and customers. Instead of checks or manual invoices, payments can be handled online and recorded automatically with tools such as:

• Square: widely used by retail and service businesses
• Stripe: popular for online payments and subscriptions
• Bill.com: designed to help manage outgoing payments and accounts payable

One benefit is the transaction history these tools create. Clear digital records make reconciliation easier and provide cleaner information for accounting review.

Document Storage and Collaboration

Anyone who has searched through a long email thread trying to find the “final version” of a contract understands why cloud storage has become so widely adopted.

Tools such as Google Drive, Dropbox, and Microsoft OneDrive allow businesses to store files in a central location where they can be accessed from anywhere.

For many small teams, knowing where documents live can remove a surprising amount of daily frustration.

Task and Workflow Management

As a business grows, it becomes harder to track everything that needs attention. Projects overlap, deadlines shift, and responsibilities can become unclear. Task management platforms help bring some structure to that process.

Common tools include:

• Trello: which uses visual boards to track work
• Asana: designed for assigning tasks and deadlines
• Monday.com: a flexible workflow platform for growing teams

Cybersecurity and Data Protection

Cybersecurity is no longer just a concern for large companies.

Small businesses are increasingly targeted by phishing attempts, ransomware, and other digital threats, sometimes simply because attackers assume smaller companies have weaker defenses.

Basic protection tools can reduce that risk significantly.

Password managers like 1Password or LastPass store credentials securely. Canon Capital IT Services & Security’s IT Security Offering has a password manager built in and includes EDR (endpoint detection & response); a next-generation level of protection (including 24/7 monitoring center) against viruses and malware for your computers and servers. Backup services that we offer protect against corruption or accidental deletion for your servers, computers, and O365 SharePoint, OneDrive, and Mailboxes (no, Microsoft doesn’t back those up as part of your licensing agreement).

These tools work quietly in the background to prevent costly disruptions.

Payroll Technology

Many software platforms advertise automated payroll systems. These tools become less convenient as payroll compliance continues to grow more complex with evolving federal, state, and local requirements.

Because of that complexity, many businesses rely on experienced payroll professionals rather than managing payroll entirely through software.

Our Payroll division here at Canon Capital Management Group takes the concern – and work – off your plate by reducing administrative burden while helping businesses remain compliant. Our Payroll team would be glad to share more details or provide a quote.

Building a Tech Stack That Works for Your Business

Technology works best when it simplifies operations rather than adding another layer of complexity. The best route: choose a few tools that keep information organized, reduce repetitive work, and make decision-making easier.

As those systems begin working together, the day-to-day running of the business becomes noticeably easier.

Need Help Evaluating Your Technology?

Choosing the right tech tools and making sure they work smoothly with your accounting and payroll processes can have a real impact on efficiency.

The IT Services & Security division here at Canon Capital Management Group works with businesses across Pennsylvania to evaluate and implement practical systems that support long-term growth.

In many cases, small adjustments to existing systems can make as much difference as adopting new tools. The right technology won’t run your business for you, but it can remove a surprising amount of friction from the day-to-day work.

If you’re considering new tools or wondering whether you could improve your current setup, our team would be happy to help.

Contact us online or call 267-381-2025 to start the conversation.

Canon Capital is seeking an experienced payroll professional to join our team.

We have an opening for a part-time Payroll Processor to work 18–20 hours per week out of our Harleysville, PA office. This is a great opportunity for someone who thrives in a detail-oriented environment and is looking for flexible hours with competitive pay.

If you or someone you know has payroll processing experience and is looking for a rewarding part-time role, we’d love to hear from you.

View the full job listing and apply here.

You know those little payroll details that seem harmless in the moment? The address that didn’t get updated. The W-4 that hasn’t been looked at in years. The bank account change mentioned after payroll has already been processed.

They may not seem like a big deal at the time, until tax season arrives, a paycheck gets delayed, or an employee gets an unexpected surprise.

A few of the most common payroll issues we see are also some of the easiest to prevent with timely communication and a quick review of employee information.

Federal withholding that does not match the employee’s situation

If an employee finds that too little federal tax has been withheld from their paycheck, the issue often traces back to their Form W-4. Life changes such as a new job, marriage, divorce, a second household income, dependents, or other income changes can all affect withholding.

Employers should not advise employees on how to complete their W-4, but they can point them to the IRS Tax Withholding Estimator. The IRS recommends checking withholding each January and after major life changes to help avoid an unexpected tax bill or penalty.

Incorrect employee address information

An outdated or incorrect address can create W-2 problems and, in Pennsylvania, may also lead to incorrect local withholding. Pennsylvania’s Department of Community & Economic Development notes that employees are required to complete a Residency Certification Form when hired and with any subsequent address change.

When an employee moves, they should complete a new Local Earned Income Tax Residency Certification Form so the employer has the correct PSD code and Earned Income Tax rate on file.

Employees find their local withholding rate and PSD code through Pennsylvania’s official Municipal Statistics address search tool.

Direct deposit changes were made too late

Another common payroll issue happens when an employee changes bank accounts and does not update their direct deposit information. If payroll is already being processed, a last-minute update may not be enough time to prevent a rejected deposit or payment delay. We can arrange to have a paper check issued during the account changeover so employees don’t miss a paycheck.

A good rule of thumb: employees should notify their employer of direct deposit changes before the end of the pay period, not on payday.

A little prevention goes a long way

Payroll accuracy depends on timely, accurate information. Encouraging employees to review their withholding, update address changes promptly, and communicate banking changes early can help reduce avoidable problems later.

For employers, clear reminders throughout the year can make a real difference. For employees, a few minutes of review now can prevent a much bigger headache at tax time.

Questions? We can help

Our experienced Payroll team is here to help you keep your payroll processes running smoothly. The links mentioned above, along with additional helpful information, can be found on our website as well.

As the April 15 tax filing deadline approaches, we want to bring to your attention a critical change in United States Postal Service (USPS) procedures that affects how postmark dates are applied. This change is vital for anyone mailing tax returns, payments, or other time-sensitive documents.

What Has Changed?

The USPS has revised its postmarking process. Previously, mail was often postmarked with the date it was deposited at a local post office or in a mailbox. Under the new system, the postmark date will generally reflect the date the mail is first processed at a regional USPS sorting facility.

This means the postmark on your envelope could be one or more days after the date you mailed it.

Why This Is Critical for Your Tax Filings

Federal and state tax authorities rely on the postmark date to determine if a tax return or payment is filed on time. The long-standing “timely mailed, timely filed” rule depends entirely on the postmark.

With this new USPS procedure, a return or payment that you mail on or just before the tax deadline could receive a postmark dated after the due date. This would cause your filing to be considered late, potentially resulting in late-filing penalties, late-payment penalties, and interest charges.

Recommendations for a Timely and Secure Filing

To protect you from the risks associated with these new mailing procedures, we strongly advise the following:

• Use Electronic Filing and Payment: The most secure and reliable way to file your taxes and pay any balance due is electronically. E-filing and electronic payments provide an official, dated confirmation of submission, eliminating any uncertainty related to mail delivery and postmarks. We encourage using this method whenever possible.
• If You Must Mail Documents: If mailing is your only option, you can no longer rely on dropping your envelope into a standard mailbox to ensure a timely postmark. To obtain proof of timely mailing, you must take your documents to a post office retail counter and use one of the following services:
• Certified Mail or Registered Mail: These services provide a mailing receipt postmarked by a postal employee and serve as official proof of the mailing date.
• Request a Hand-Stamped Postmark: When mailing at the post office counter, you can ask the clerk to hand-cancel your envelope with a postmark showing that day’s date.
• Use an IRS-Approved Private Delivery Service: Certain services from private carriers like UPS and FedEx are designated by the IRS as valid alternatives to USPS for timely filing.

 Please do not assume that dropping your tax documents in a USPS collection box on the due date will be sufficient to avoid penalties.

Have questions? Contact us online or call 215-723-4881.