When we engage with new tax clients at Harmony, the number one request is almost always the desire to have more active input from our team on helping to optimize tax outcomes for a year. That makes this the perfect time to remind clients that we’re here to work with you, on demand, to ensure your finances are aligned with your goals. Whether it’s changes in your personal life, investments, or career, scheduling a proactive year-end tax planning session now can help maximize deductions, avoid surprises come April, and set you up for financial success in 2025.

The SECURE 2.0 Act, signed into law in 2022, brings sweeping changes to retirement plan policies, with implications for both employers and employees. This guide will explore both the key provisions of SECURE 2.0 and the various retirement plan options available to businesses, including SIMPLE IRAs, SEP IRAs, and 401(k)s.

For this month’s Lessons From the Line we’re offering up the first in a new series of classes intended to demystify some accounting basics for Harmony’s hospitality clients. LFTL’s Payroll 101 series will tackle the ins and outs of hospitality payroll, from pre- and post-tax deductions to SUTA and FUTA, and lots more. This month, we’ll start with a crash course on the difference between W-2 Employees and 1099 Contractors.

This is a quick reminder of DC Department of Employment Services' (DOES) compliance requirements around Paid Family Leave - though Harmony cannot provide HR or payroll guidance, we're invested in helping our clients stay up to date on communications and requirements from DC, especially as the city doesn't always communicate especially thoroughly.

With the pandemic firmly in the rearview mirror, our restaurant clients have seen a return to full seasonality in 2024. Many restaurateurs have been caught off guard by this "return to norm," as the last few years have accustomed them to operating on a week-to-week basis. However, the return to seasonal trends requires a mindset change.

Last year, Washington, D.C. updated its regulations with the Restaurant Revitalization and Dram Shop Clarification Amendment Act of 2024. The updated legislation went into effect last month, and includes a number of changes and updates to DC’s Dram Shop laws as well as a handful of gestures toward easing the pain of the chaos that is the protracted end of DC’s tipped minimum wage.

LFTL covers some suggested reading this month spanning the FLSA Minimum Salary increases, Starbucks, Grimace, and more.

Uber is shutting down the alcohol delivery service it acquired for north of $1.1 billion to fold it into the main UberEats app. There were other issues with Drizly, and the company line is that Uber wanted to deliver everything under one brand, but to shutter a $1B acquisition dovetails with a larger market shift that can be constructive to small business owners.

We see it all the time. The end of the year comes along and we get a detailed list of what you’ve paid in wages throughout the year. There, front and center, is a W2 being paid to a partner. Let’s take a closer look at this picture.

Phantom income often arises when using a passthrough entity. Often a problem for LLCs, S Corps, and partnerships, phantom income occurs when the business entity reports a yearly profit, yet the owner or investors in the business do not receive cash reflecting the allocation. The IRS still taxes the full amount of the business’s income, creating tax on unreceived income for business members.

“It’s not a lie, it’s an adjustment. It’s the rule of three….if a guy tells you how many girls he’s hooked up with, it’s not even close to that. You take that number and divide by three, then you get the real total. So if Kevin’s saying it’s been three girls, it’s more like one. Or none!....The Rule of three, it’s an exact science. Consistent as gravity.” – American Pie