Commercial Businesses Articles

Manufacturing companies must create comprehensive and realistic budgets in 2025. Key considerations for creating budgets include avoiding reliance solely on past results, seeking input from all departments, setting attainable goals, managing cash flows, and treating budgeting as an ongoing process.

The IRS has issued final regulations for the Section 45X advanced manufacturing production credit, which supports manufacturers producing clean energy equipment in the U.S. between 2022 and 2032. The regulations clarify eligibility, production costs, and the interplay with other credits, while also introducing substantiation requirements for material costs. Despite the clarity provided, compliance remains complex, and the credit’s future is uncertain under the incoming administration.

A business continuity plan is essential for manufacturing companies to minimize disruptions and ensure rapid recovery during crises such as natural disasters, supply chain disruptions, or IT failures. Key steps include forming an interdisciplinary team, assessing risks, developing contingency strategies, and regularly testing and updating the plan. Proactive planning can safeguard operations and enhance resilience in the face of unexpected events.

We encourage you to listen to the recording of this insightful session, which delves into the complexities of ownership transfer whether you are planning to sell your business, pass it on to the next generation, or transition to a new leadership team, this recording will provide you with critical strategies to ensure a smooth and successful transfer. 

Manufacturers can control labor-related costs, such as workers’ compensation and unemployment insurance, by implementing safety programs and strategically managing hiring practices. Accurate employee classification, return-to-work programs, and challenging invalid unemployment claims are key strategies to reduce premiums and tax rates. Taking these steps can lead to better financial stability and increased profitability.

AI is transforming manufacturing by improving efficiency, product development, and decision-making. Key applications include predictive maintenance, quality control, and supply chain management. While AI offers significant benefits, it requires careful planning, investment, and a phased implementation approach to ensure success.

Manufacturers operating across state lines must understand their multistate tax liabilities, determined by whether their activities establish a nexus in each state. The U.S. Supreme Court's Wayfair decision and updated Multistate Tax Commission (MTC) guidelines have broadened the definition of nexus, making it essential for businesses to evaluate their tax obligations in each jurisdiction through a nexus study.

Choosing the right inventory accounting method, such as FIFO or LIFO, is crucial for manufacturing businesses as it significantly affects taxes, net income, and financial reporting. Careful consideration of your company's specific needs and circumstances is essential when selecting the appropriate method.

The tax implications of real estate gains can vary based on factors like property type, ownership structure, and depreciation. While long-term capital gains are generally taxed at 15% or 20%, certain gains, particularly those involving depreciation, may be taxed at higher rates. Additionally, the 3.8% Net Investment Income Tax (NIIT) and state taxes could also apply.

Investing in automated equipment can enhance efficiency, quality, and brand image for manufacturers, while also addressing skilled labor shortages and improving employee morale. However, it involves significant initial costs, ongoing training, maintenance, and cybersecurity considerations.