In the blink of an eye, it will be September and there will be just four months left in 2024 to maximize tax credits and deductions for your business.

Here are some questions you may want to think about to make the most of the time left in 2024.

Have you been thinking about purchasing equipment, machinery, certain software, or furniture?

Under Section 179 of the tax code, you can deduct the full purchase price (up to certain thresholds) if you put the item purchased into service this year. As an alternative, you may be eligible for bonus depreciation under Section 168, where you can deduct 60% of a qualified expenditure this year and 40% over the remainder of the item’s useful life. (Bonus depreciation will decrease to 40% in 2025 and 20% in 2026; then, it phases out in 2027.) Before making any purchases, you may want to explore how  energy-efficient equipment can help you reduce ongoing operating expenses.

Are you considering updating your restaurant?

Section 168 bonus depreciation can also be used for certain interior improvements. A cost segregation study may help identify fixed assets that qualify for faster depreciation (just give yourself enough time, as they usually take four to eight weeks to complete). If you own the building where your restaurant operates, additional tax deductions may be available for energy-efficient improvements.

Do you need maintenance or repairs performed on equipment?

As long as the maintenance or repair isn’t to a critical or major component, you may be able to deduct the full cost rather than capitalizing and depreciating it over time.

Are you looking for ways to strengthen your ability to attract and retain employees?

If you meet eligibility requirements, you may receive tax credits for certain benefits you provide to your employees, including health care coverage, retirement benefits, childcare, and education or student loan benefits. In addition, any year-end bonuses you give to employees are tax-deductible.

Are you looking to hire additional help for the holiday season?

Hiring members of certain groups, like veterans or public assistance recipients, may make you eligible for the Work Opportunity Tax Credit (WOTC).

With the holiday season approaching, should you step up marketing efforts?

Like other costs of running your business, advertising, and marketing expenses are usually deductible. You may also want to consider selling gift certificates to boost revenues this year (sales tax won’t apply until gift certificates are used).

If you’re hoping for a year-end burst in sales but worried about ending up with extra food, have you considered food donations?

Donating extra food to qualified non-profit organizations benefits the community and provides tax deductions – as long as you keep good records.

Should you stock up on bulk purchases of nonperishable goods?

It can help reduce your taxable income this year and give you some breathing room on purchases going into 2025.

If answering these questions brings up more questions, please don’t hesitate to reach out to the professionals at RBT CPAs for answers. We offer accounting, advisory, audit, and tax services – as well as estate and gift planning. To learn more, give us a call or send us a message. We would love to have the opportunity to show you how we can be Remarkably Better Together.

RBT CPAs never offshores work outside of the U.S., so you always know who is handling your financial information.

From enhancing customer experience to streamlining operations, technology has become a competitive game-changer. Here are more than 20 ways technology, software and apps are promoting productivity, saving money, or improving service in the restaurant sector.

1. Automated invoicing and inventory systems connect with your POS and supplier systems to better manage food and beverage costs.
2. Contactless payment enables diners to tap their contactless cards or smartphones on a payment terminal to pay without cash or a PIN.
3. Delivery apps enable customers to place and pay for their orders and delivery via their mobile devices. There are also solutions that enable you to integrate orders coming from multiple apps to better manage the process.
4. Digital menus with augmented reality allow customers to see potential food choices in 3D before placing their order.
5. Digital menu boards are visually attractive electronic screens that can be used to display and easily update special offers, menu items, prices, events, and more.
6. Event software helps you manage parties, weddings, special events, and more with documentation tracking, communication tools, and reports.
7. Inventory management solutions help track stock and automate ordering to control costs, reduce waste, and ensure you have what’s needed to deliver on your menu. Some are even tailored specifically for bars.
8. Kitchen display systems replace paper orders with online ones to facilitate smoother, more accurate, and timely food prep.
9. Online order systems let customers place orders directly from a restaurant website or via a third-party app.
10. Point of Sale or POS systems serve as a command center where numerous functions come together to help you manage a variety of tasks from order taking and processing to sales monitoring and payment processing.
11. QR code menu allows you to create a QR code, and place it on tables. Customers scan them to see the menu, place orders, and make payments via their own mobile devices.
12. Reservation systems allow customers to make reservations online and restaurants better manage seating arrangements and wait times. There are even solutions that sell tickets for seating to minimize no-shows and last-minute cancellations.
13. Rewards programs, whether as a stand-alone or integrated with another system, allow you to reward customers with special offers, discounts, and other perks to build loyalty.
14. Robot assistants help kitchen staff by performing repetitive tasks like chopping and stirring.
15. Scheduling software to help you schedule employees, as well as track and manage labor costs.
16. Self-order kiosks enable customers to place orders using a touchscreen.
17. Supplier management solutions simplify all of the activities that go into overseeing multiple vendors.
18. Waste management software and apps can help with sustainability efforts by helping you reduce the use of non-eco-friendly materials while directing where you can send leftovers.
19. Waitlist app helps manage waitlists and improve customer communications during busy times.
20. Wearable tech devices facilitate communication between customers, staff, and managers, promoting greater responsiveness when a customer needs something.
21. Website builder programs specifically tailored for restaurants enable you to showcase your menu, and hours of service, accept online orders, and more.

That’s just a sampling. Before embarking on a tech shopping spree, you may want to consider how technology fits into your overall business strategy so your investments make the greatest impact.

To free you up to focus on your business, we want to remind you that you can always count on RBT CPAs for accounting, audit, tax, and advisory services. Give us a call to see how we can be Remarkably Better Together.

RBT CPAs never offshore work outside of the U.S. so you always know who is handling your financial information.

Forecasting, tracking, and managing food costs, labor costs, and operation costs helps foster strong financial management during the best of times. These actions take on a whole other level of importance during the uncertain times we’re navigating today.

With food prices up 25% since 2020 and labor costs up an estimated 25% due to the tight talent market and mandatory wage increases, restaurant owners are being challenged like never before. Keeping a close eye on key numbers can help restaurant owners make informed decisions to help protect profits and drive success.

While there are numerous metrics to track financial performance, for restaurants the top three focus on food, labor, and operations.

Food cost is the total expense incurred for the ingredients used in preparing a dish. It is a significant factor affecting a restaurant’s profitability as it directly influences the pricing of menu items. For example, if a dish costs $5 to prepare and sells for $15, the food cost percentage is 33%.

Ways to manage food costs include negotiating prices with suppliers, strengthening inventory management, recipe costing (down to the ingredient and portion size), joining a purchasing program, taking a more flexible approach to creating a menu, and regularly reviewing menu pricing based on market fluctuations.

A daily review of Cost of Goods Sold (CoGs) – the total cost of food and drinks served in a day – can help you spot rising costs, make adjustments, and prevent over-ordering and waste. Staff can help manage costs by avoiding over-portioning, preventing waste, and getting orders right the first time.

Labor cost, on the other hand, encompasses all expenses related to staffing, including wages, benefits, payroll taxes, and training. In a labor-intensive industry, these costs can quickly escalate and impact profitability. You can manage these costs by optimizing scheduling to prevent overstaffing during quiet periods and understaffing during peak times, cross-training staff in multiple roles, retaining high-performing employees and implementing efficient processes to reduce the time taken to perform tasks.

You may also want to consider how technology can help boost productivity and lower labor costs, with self-service ordering options and kiosks; online reservation systems; dynamic menus linked to QR codes; pay-at-the-table tools; and more data to forecast more accurate scheduling.

Operating cost refers to the total expenses related to housing the restaurant. This includes rent or mortgage payments, property taxes, utilities, and maintenance. Ways to manage these costs include negotiating lease terms, improving energy efficiency to lower utility costs, and performing regular maintenance to prevent costly repairs.

Knowing your numbers provides several benefits. First, it aids in pricing decisions. By understanding the costs involved in creating a dish, restaurants can price menu items appropriately to ensure profitability. Second, it helps identify inefficiencies. High food costs may indicate waste or theft, high labor costs could point to overstaffing, and high operating costs might mean it’s time to renegotiate a lease. Finally, monitoring these costs allows for better budgeting and forecasting, enabling restaurant owners to plan for the future and make informed business decisions.

If you need assistance tracking, monitoring, and evaluating costs, RBT CPAs are available to help you manage the financial side of your business with accounting, audit, taxes, and advisory services. Let us know what you need so we can show you how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Several states have already done away with tip credit for food service workers, and more are exploring the option, including New York. While the debate continues about whether this is a positive or a negative for restaurants and employees, New York has moved ahead with changes to wage theft laws, along with minimum wage increases starting this year and continuing in 2025 and 2026. This makes understanding how the tip credit works in New York even more important as mistakes can be costly and even result in criminal proceedings.

Here’s a quick review…

What is a tip?

Any amount of money a customer voluntarily leaves that’s above the ticket price plus tax is considered a tip.

What is a tip credit?

It allows employers to pay food service workers a rate that’s lower than minimum wage by including tips or a portion of them in wage calculations. Foodservice workers’ combined wage plus tips must equal at least the full minimum wage; otherwise, the employer must make up the difference.

Who owns a tip?

A tip belongs to an employee – not an employer. An employer is not entitled to take any part of a tip, except for a percentage of tips for a valid tip pool.

Who is considered a tipped worker?

While this isn’t defined under NY law, the FLSA applies and defines it as “a tipped employee is an employee engaged in an occupation in which they customarily and regularly receive more than $30 a month in tips.”

What about service charges?

Under the FLSA, mandatory service charges are the property of the restaurant as they’re not considered tips, but New York has a more generous policy so it takes precedence. It assumes service charges are gratuities and belong to employees. Employers must clearly let customers know when administrative charges like banquet or special event fees are not tips and, if the restaurant splits the charges with staff, they must let customers know the exact split rate.

What is New York’s minimum wage for tipped food service workers?

In NYC, Long Island, and Westchester, the cash wage is $10.65 and the tip credit is $5.35. For all other NY locations, the cash wage is $10 and the tip credit is $5.

What recourse do employees have if tip regulations are not followed?

They may report or file a complaint regarding hour or wage violations and are protected by law against retaliation. As of the end of last year, wage theft became eligible for criminal prosecution.

Are there tip recordkeeping and reporting requirements?

Yes! They help ensure compliance with state and federal wage and hour laws and serve as proof that you are upholding minimum wage requirements. Under NY Labor Law Section 196-d, employers are required to have daily records of the tips employees receive and those records are subject to DOL inspections. Also, employee wage statements must show how much of the pay is in tips and wages.

To help with recordkeeping and compliance, there are restaurant management systems to track and retain tip documentation. There are also applications allowing employees to self-report.

While the future of tip credits in New York is up in the air, right now they still exist. If you have any questions, we strongly encourage you to seek legal counsel.

Please remember RBT CPAs is available to meet all of your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 50 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Note: RBT CPAs is not a law firm and the information provided herein should not be taken as legal counsel or advice. Any questions should be directed to your legal counsel.

From delivery drones and burger flipping robots…to AI powered drive thru service, phone answering technologies, and online reservations…to integrated inventory, ordering and point of service systems, food delivery apps and more, restaurants are being bombarded with a variety of technology solutions that they purportedly need to survive and thrive. While new and emerging technologies will no doubt play a role in the future of restaurants and how they operate, before rushing forward it may be in your best interest to take a step back by clarifying your business strategy and plans, and then considering which solutions can help you meet your goals.

What type of restaurant do you own? What are your short- and long-term growth goals and plans? Who are your customers, what are their demographics, and what do they expect when they visit or order from your establishment? What are the major brand attributes that drive your business success? How are your finances – profit margins, cash flow, cost of goods sold, inventory costs, and more? What are your biggest pain points? What are you hoping to improve? How do you measure success?

Having a clearly defined strategy puts you in a better position to protect the assets and attributes that contribute to your current-day successes, while clarifying which types of technology may make the most sense for your business going forward.

Today, there are technology solutions for virtually every aspect of running a restaurant. In truth, not all of them are a good fit for every restaurant. For example, a fine dining establishment is going to have to make a call about whether clients expect a live person answering a phone to take a reservation or a chatbot sending them a link. A casual dining establishment is going to have to determine whether adding a mobile food services platform is going to help or hurt margins. A quick serve restaurant may have to weigh the advantages of AI drive thru verses potential impact on on-site dining.

Once you have a clear strategy and goals, it’s easier to determine where AI and technology may fit and can add the most value.

When it comes to inventory, purchasing, and supply chain, AI solutions can analyze historical data on sales, customers, and more to more accurately forecast demand and supply, helping reduce waste from over-ordering and food spoilage. Some solutions can help track shipments so you can quickly respond to delays. Others can track upcoming menu promotions, ingredient levels, and expiration dates. There are also solutions that use real-time data for dynamic menu pricing that responds to price fluctuations and market conditions.

When it comes to labor, technology solutions – like drive thru AI, self-ordering kiosks, and online reservations or ordering – are available to free staff up to focus on value-added activities (i.e., customer service or food preparation). Other types of systems help managers make appropriate staffing decisions and monitor performance.

When it comes to customer service, solutions are available to immediately answer customer questions; make recommendations; handle reservations; facilitate easy, quick payments; and streamline ordering.

As for marketing, AI tools and solutions can help you analyze social media data to understand how customers feel about your restaurant, what customers are looking for so you can customize campaigns, and address concerns quickly. You can also use AI to help create content and images for a variety of channels (website, email, social media etc.).

There are also tools to help monitor, log, and automate food safety compliance-related tasks like temperature and cleanliness. And if your brand and reputation, in whole or in part, links to environmental, social and governance (ESG) activities, there are solutions that can help track and monitor your performance in priority areas so you can share this information with customers who support your establishment because of aligned values.

Taking a cue from large chains, we’re seeing AI used to monitor inventory; predict purchasing needs; forecast demand; answer customer questions and complaints; account for weather, traffic and seasonal swings; manage scheduling; stay on top of equipment maintenance; take reservations; create, adjust and personalize menus and prices; make recommendations to customers; take orders; manage the entire drive thru encounter; pay from tableside; ID trends; create and execute marketing plans; and more.

Ultimately, if the AI and technology solutions you choose to invest in align with your brand and support your goals, your business can benefit. Staff can be freed up to focus on value-added activities. Managers can make more informed decisions about staffing, menus, pricing, and inventory. The customer experience can be enhanced and productivity increased, while waste and mistakes are minimized.

Moving forward requires an unwavering commitment on your part to protect client’s data, train staff, re-engineer processes, and ensure your technology investment enhance the key reasons customers visit or purchase from your establishment in the first place.

As you consider which technology solutions best support and align with your goals, brand, and business, we want you to know you can count on RBT CPAs for your accounting, tax, audit, and advisory needs. We’ve been proudly serving municipalities, businesses, non-profits, and individuals in the Hudson Valley for over 55 years. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Running a family-owned restaurant is often a labor of love, with each generation imparting their unique flavor to the business. However, to ensure that your legacy – and the impact it can have on loved ones and assets (including your restaurant) – plays out according to your wishes, it is crucial to have a comprehensive estate and succession plan in place.

Estate planning helps you define how your personal affairs and assets should be managed while you are alive and confirms what will happen upon your death. When it comes to your business, an estate plan can foster a smooth transition of leadership and operations by including a succession plan.

What’s more, estate planning helps maximize the value of your assets that go to your beneficiaries, while minimizing tax obligations. As it relates to your restaurant, it can be used to establish buy-sell agreements, significantly reduce tax burdens on heirs, protect it from creditors, and shield it from being used to settle taxes or personal debts.

It’s never too early to put a plan in place, but there is a time when it’s too late. Failing to create, review, and update a plan at least once a year can have a significant impact on the people you want to take care of, the value of your estate, your tax obligations, and the legacy you leave behind. With major changes to Federal laws scheduled to take effect in just over 22 months plus the impact of New York laws, it’s even more important that you make the time to create and update your estate and succession plan now.

The importance of estate and succession planning cannot be overstated. Without a clear successor, especially when there’s a sudden occurrence resulting in disability or death, a restaurant may face significant upheaval and operational challenges. This has the potential to lead to a restaurant’s closure or sale. Family discord may arise due to different visions for the restaurant’s operation. Creditors and vendors may look for payment in full.

There are also tax implications. Without an estate plan, for instance, the restaurant may be subject to hefty estate taxes that could impact the financial health of the business. A well-crafted plan can optimize tax benefits and protect the restaurant’s assets.

Just as you wouldn’t want state law to dictate how to take care of your family and business today, you shouldn’t want it to dictate what happens to your business (and family) upon your disability or death. There’s one way to ensure that doesn’t happen: develop an estate and succession plan today and make sure it’s always up to date by reviewing it annually.

RBT CPAs professionals in our Estate, Trust and Gift Practice can help you create and update an estate and succession plan that gives you peace of mind in knowing you, your loved ones, and your business will be taken care of according to your wishes during your lifetime and after. Please don’t hesitate to give us a call and find out how we can be Remarkably Better Together.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Have you been thinking about purchasing new or used equipment to enhance services? How about upgrading technology and software?

With end of year approaching, you have limited time left to consider whether to purchase, lease, or finance certain assets to take advantage of Section 179 tax benefits. It’s also a good time to consider how Section 179 may play into your business and tax strategy for 2024.

Section 179 uses first-year expensing. That means you can deduct the expense for an eligible asset immediately, rather than depreciating it over time. It serves as an incentive for a business owner to invest in the business and enhance its capabilities and services with the purchase and installation of capital equipment.

One big caveat: You must put the asset you purchase into service the year that you plan on taking the deduction. With just weeks left in 2023, it will be important to account for this in your planning.

Most small and mid-sized business owners qualify for Section 179 deductions. Qualifying purchases can include dining room furniture and kitchen equipment; POS systems, computers, and software; certain vehicles (some with annual deduction limits); machinery; and more. Security systems, HVAC systems, roofs, fire protection systems, and other structural improvements to non-residential buildings may also qualify for a Section 179 deduction.

Equipment can be new or used (as long as you weren’t the prior owner). It can be purchased outright, financed, or leased. So, let’s say you want to purchase qualifying equipment for $1 million and you have $250,000 for the down payment and finance the remaining $750,000. As long as the equipment is put into service this year, you can deduct the full $1 million this year.

Through 2026, there’s an added bonus. For expenses not eligible for the Section 179 deduction, there’s a bonus depreciation allowance in year one. For 2023, bonus depreciation is 80% — remember, that’s in addition to regular depreciation. The bonus depreciation decreases for the next three years (60% for 2024, 40% for 2025, 20% for 2026). Starting in 2027, this additional benefit will no longer be available. Because of this phase out, businesses benefit the most by making capital purchases sooner rather than later.

Section 179 numbers to know for 2023:

• Maximum 179 deduction: $1,160,000
• Phaseout threshold begins at $2,890,000 and ends at $4,050,000. (So, if you buy eligible assets that cost more than $2,890,000, your maximum 179 deduction is reduced dollar for dollar by amounts over $2,890,000. Purchases above $4,050,000 are not eligible for a 179 deduction, but bonus depreciation can still apply.)
• Bonus depreciation: 80%

If you need help determining whether to act quick to take advantage of Section 179 this year or whether to make it part of your tax strategy for 2024, your RBT CPA client manager can help – reach out to him/her today. Please remember RBT CPAs is here to help with your accounting, tax, audit, or business advisory needs. Interested in learning more? Give us a call today.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

Earlier this year, Governor Hochul announced annual increases to New York’s minimum wage to help low-wage employees keep up with the rising cost of living.

Beginning January 1, 2024, New York’s minimum wage will increase to $16 in New York City, Nassau, Suffolk, and Westchester. For all other areas in the state, it will increase to $15.

In addition, we are awaiting final word on whether the NYS DOL will approve proposed changes to hospitality wage orders as published in the State Register October 4, 2023. If approved as is (which is expected), effective January 1, 2024, wages for food service workers in:

• NYC, Long Island and Westchester will be $16 for minimum wage; $10.65 for cash wage; $18.65 for overtime cash wage and $5.35 for tip credit.
• All other parts of New York will be $15 for minimum wage; $10 cash wage; $17.50 for overtime cash wage and $5 for tip credit.

Starting January 1, 2027, increases will be tied to inflation and based on the three-year moving average of the Northeast Region’s CPI for Urban Wage Earners and Clerical Workers (CPI-W). This is intended to help maintain the purchase power of workers’ wages from one year to the next.

As of when this article was written (December 15), we are still awaiting final word on whether the NYS DOL will approve proposed changes to hospitality wage orders as published in the State Register October 4, 2023. This will result in changes to wages for food service workers (as noted above), wages for hospitality service employees, meal credit and uniform allowance.  Finally, there are proposed changes to the salary exempt threshold effective January 1, 2024.

We will let you know when these proposed adjustments are approved. In the meantime, it’s a good idea to consult your employment or labor attorney to ensure compliance.

To free you up to focus on these and other important aspects of running your business, please remember RBT CPAs is here to help with your accounting, tax, audit, or business advisory needs. Interested in learning more? Give us a call today.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.

As New York State increased its minimum wage for 2024, many wondered what was going to happen with the “tip credit.” The answer was announced at the end of December. Here’s a recap…

To start with the basics, the Federal government sets minimum wage. Since New York sets a higher minimum wage, it takes precedence. In New York, the minimum wage increased/is increasing effective January 1, 2024, 2025, and 2026. At the same time, the hospitality industry will experience increases in tip credits.

Hospitality employers can meet the required minimum wage through a combination of cash wages and a tip credit, which is a credit or allowance for tips employees receive from customers. The amount of the cash wage and tip credit varies by region and job classification.

Effective January 1, 2024 through December 31, 2024:

For service employees (i.e., employees who don’t serve food or beverages but typically receive tips like a bathroom attendant):

• In NYC, Long Island, and Westchester County, the cash wage is $13.35 and the tip credit is $2.65.
• In the remainder of New York State, the cash wage is $12.50 and the tip credit is $2.50.

For food service workers (i.e., employees who serve food or beverages and typically receive tips, like a waiter or bartender):

• In NYC, Long Island, and Westchester County, the cash wage is $10.65 and the tip credit is $5.35.
• In the remainder of New York State, the cash wage is $10 and the tip credit is $5.

However, hospitality employers cannot take the tip credit on days when a tipped worker spends more than 2 hours or 20% of a shift doing non-tip work and on weeks when service employees’ tips are lower than:

In resort hotels:

• In NYC, Long Island and Westchester County: $8.95.
• In the remainder of New York State: $8.40.

In restaurants and all-year hotels:

• In NYC, Long Island and Westchester County: $3.45.
• In the remainder of New York State: $3.20.

So, we enter 2024 with a New York tip credit intact, continuing the several-years-long debate on whether to eliminate sub-minimum wage for tipped workers. We’ll keep you updated as we learn more.

While your employment or labor attorney is the best person to contact with questions about wages, when it comes to accounting, tax, audit, or business advisory needs, RBT CPAs is here for you. Please don’t hesitate to give us a call.

RBT CPAs is proud to say 100% of its work is prepared in America. Our company does not offshore work, so you always know who is handling your confidential financial data.