Commercial Businesses Articles

While financial statements can provide a snapshot of your company’s financial health, a benchmarking study offers the deeper insights needed to interpret that picture and drive smarter decisions.

Given the high costs of maintaining inventory, now’s a good time for manufacturers to explore options to control them. Here are a few.

Drafting an accurate budget can improve a manufacturer’s operational discipline and position the company to respond more effectively to market changes and unexpected challenges.

Succession planning is critical for manufacturing business owners who want to protect their company’s future. By defining goals, choosing the right ownership transfer strategy, and preparing successors through training and mentorship, you can ensure a smooth leadership transition and preserve your legacy. Starting early gives your successors time to learn, build relationships, and maintain operational stability long after you step away.

The One Big Beautiful Bill Act introduces a 100% first-year depreciation deduction for nonresidential real estate classified as Qualified Production Property (QPP), offering significant tax savings for manufacturers. To qualify, properties must meet strict usage and timing requirements, and businesses should be aware of limitations such as nonqualified areas, leased buildings, and potential recapture rules. Careful planning and IRS guidance will be essential to maximize this benefit.

As 2025 draws to a close, employers should review whether they have properly included the value of common fringe benefits in their employees’ and (if applicable) 2% S corporation shareholders’ taxable wages.

Business gift deductions are generally capped at $25 per recipient per year, but exceptions exist for gifts to companies, couples, and incidental costs like packaging or shipping. Employee gifts follow different rules: cash or gift cards count as taxable wages, while small noncash items may qualify as tax-free fringe benefits. Accurate documentation of gift details and business purpose is essential to maximize deductions and remain compliant.

OBBB has made the Qualified Opportunity Zone (QOZ) program permanent and introduced enhanced tax incentives for manufacturers building in rural QOZs, including the creation of Qualified Rural Opportunity Funds (QROFs) that offer a 30% basis step-up after five years. These changes make rural QOZs especially attractive for manufacturers seeking funding and long-term tax savings, with additional advantages such as a lower improvement threshold and extended capital gains exclusions.

Accrual-basis businesses can reduce their 2025 tax liability by recognizing expenses incurred this year, even if payment occurs in 2026 including wages, taxes, and utilities. Reviewing prepaid expenses, writing off uncollectible receivables, and properly timing income and deductions are key strategies for year-end tax planning.

QIP offers businesses a way to accelerate deductions on nonresidential building improvements through bonus depreciation and Section 179 expensing. Recent legislation under the OBBB permanently reinstates 100% bonus depreciation for qualifying assets placed in service after January 19, 2025, while also increasing Section 179 limits. Strategic planning is essential to balance immediate tax benefits against potential future implications like depreciation recapture and excess business loss rules.