Compensation Transparency is Now a Competitive Advantage

by

Pay transparency is reshaping the workplace. Is your business ready?

Not long ago, it was a major HR violation to compare paychecks. Employee salaries were kept tightly under wraps, and employees were prohibited from discussing their earnings with coworkers.

But as of 2025, 15 states have enacted laws requiring employers to disclose pay ranges for open positions, either in job postings or during the hiring process.

Even businesses in states without mandates are feeling the pressure to disclose employee salaries, as remote hiring and employee expectations push compensation transparency into the mainstream. It may be worth giving your compensation policies another look.

What pay transparency means for your business

According to a 2025 Payscale report, 31% of companies feel they’re losing talent due to the perception of unfair pay. Transparency policies can help combat paycheck misconceptions, communicating how pay decisions are made and how employees can grow their compensation over time.

Maintaining a culture of transparency directly impacts key areas of your business:

  • Hiring. Posting salary ranges upfront filters out mismatched candidates and speeds up the hiring process.
  • Retention. When employees understand how their pay is determined, they’re less likely to feel undervalued or worse, jump ship for a competitor.
  • Workplace culture. Businesses that can explain their compensation decisions can strengthen trust among prospects and employees.
  • Your employer brand. The way your business handles compensation may be put on blast on job boards, review sites and social media. A reputation for fair, transparent pay can be just as powerful a recruiting tool as the salary itself.

The business case for getting ahead of it

The report also reveals that 56% of companies are now publishing pay ranges in job ads. That means if you’re not doing it, your competition may be a step ahead.

Here’s where to start:

  • Know what you’re working with. Are employees in similar roles with similar experience being paid consistently? Before you publish your salary ranges, take a hard look at your current compensation structure. Unexplained gaps are a legal and cultural liability, and transparency will expose them.
  • Build a framework for how pay is determined. Employees and candidates want to understand what drives compensation — experience, performance, tenure, market data. A documented framework gives your numbers credibility and context.
  • Make sure your managers are prepared. When compensation becomes more visible, employees will have questions and concerns. Arm your managers with the facts they need to respond. If managers can’t clearly explain how pay decisions are made, transparency can backfire.
  • Don’t wait for your state to require it. Pay transparency laws are expanding quickly, and businesses that scramble to comply after the fact face more disruption and more cost than those who get ahead of it. Building the right structure now puts you in control of the process.

Not sure where your compensation stands?

Compensation strategy is just one piece of running a smart, competitive business. The advisors at Magone & Company can help business owners connect the dots. For more information, reach out today at (973) 301-2300.

 

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your business situation.

 

COVID-era Tax Penalties: There May be Money on the Table — But Not for Long

by

A recent federal court ruling, Kwong v. United States, has opened a potential window for taxpayers to recover certain IRS penalties and interest tied to the COVID-19 pandemic.

If you paid failure-to-file or failure-to-pay penalties during that period — or have unpaid assessed amounts — you may be eligible for a refund or abatement.

The ruling may affect individuals, businesses and trusts/estates that paid (or still owe) penalties and interest during the pandemic period, including certain estimated tax penalties.

The IRS will not issue refunds automatically. There may be a limited‑time opportunity to recover penalties and interest paid during the pandemic. Filing a protective claim by July 10, 2026 may be advisable to preserve your right to claim a refund if the case is ultimately resolved favorably. A protective filing does not guarantee a refund, but it keeps the claim open while the issue continues to develop.

We’re actively monitoring this developing area of law. Contact our office at (973) 301-2300 for more information on filing a protective claim.

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your situation.

The Financial Metrics That Investors are Really Looking at

by

Your financial metrics tell a story about your business’s fiscal health. As a business owner, you’re almost certainly reading them differently than a potential investor or funding source. Where you might see profitability and growth, they’re evaluating likely risks and returns.

Understanding which numbers investors care about (and why) can mean the difference between a potential business opportunity and a hard pass.

So what key metrics help drive investor decisions?

Revenue growth and quality. Revenue growth is one of the first things investors look at, but what they really want to know is where that revenue is headed.

Year-over-year growth rate signals momentum. Is the business accelerating, holding steady or losing ground? Consistent growth over time is attractive to investors. But if a business has plateaued — even with impressive revenue — that raises questions about its longevity.

Two businesses with identical revenue figures can look very different once the quality and consistency of that income is examined. Recurring revenue (like subscriptions and long-term service contracts) is predictable and may receive a higher valuation. But project-based revenue doesn’t have the same level of predictability, and investors value that risk accordingly.

Profitability metrics. The gross profit margin reflects what’s left after the cost of goods or services, giving a good indication of pricing power and operational efficiency. Industry benchmarking matters here, because what’s considered healthy varies across sectors.

EBITDA is of course the profitability lens favored by investors because it offers a clean view of operating performance and true earnings potential.

Investors are also looking at your net profit margin to see what’s left after all expenses are accounted for. A company generating strong revenue but thin net margins raises questions about scalability.

Cash flow. Profit on paper doesn’t always translate to cash in hand. Free cash flow, which represents what’s left after operating expenses and capital expenditures, reveals the money a business actually generates.

Here’s something that surprises a lot of business owners: You can be profitable and still be short on cash.

Investors understand this, and they dig into cash flow to find out if the money coming in is staying in the business. They want to see that strong months translate to cash in the bank, not disappearing into your overhead. A business that has to constantly pour money back in just to stay afloat doesn’t sit well with investors.What’s hiding in your financials?

Some of the biggest investor concerns aren’t always obvious from a financial review. Here are a few of the most common red flags investors look for:

  • Customer concentration. If a large portion of revenue comes from one or two clients, that dependency is a risk that affects business valuation.
  • High churn. Consistently losing customers tells investors the business is struggling to retain clientele.
  • Thin margins behind strong revenue. Impressive top-line numbers don’t mean much if profitability is weak underneath.
  • Growth outpacing infrastructure. Rapid expansion that the business isn’t operationally equipped to support is not a selling point.

Remember, investors are pricing risk just as much as they’re pricing opportunity.

Know your numbers

Whether you’re seeking capital, planning an exit or simply building long-term enterprise value, a strategic CPA partnership can make a difference. Reach out to the advisors at Magone & Co to learn how we can support your business.

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your unique circumstances.

What to Do if You Receive IRS Notice CP53E

by

The IRS is sending Notice CP53E to some taxpayers who had a balance due on their 2025 returns — and it’s causing understandable confusion. The notice asks for bank account information so the IRS can issue a refund via direct deposit.

The notice is also going out to taxpayers who are expecting a refund but didn’t include banking information with their return. Both situations are part of a broader government-wide move to electronic payments under Executive Order 14247.

If you receive this notice, here’s what to do:
Log in to your IRS Individual Online Account and provide your banking details within 30 days of the notice date. If you are expecting a refund and don’t take action, the IRS will mail a paper check about six weeks after the notice date.

One important warning: Fraudulent versions of this notice are circulating. Never provide your banking or personal information through any link in an email or text message.

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your unique circumstances.

What U.S. Importers Should Know About the New Tariff Refund Portal

by

A recent Supreme Court decision has created an unexpected opportunity for businesses that import goods into the United States — the chance to recover tariffs that a federal court determined were not legally valid.

U.S. Customs and Border Protection has created a portal where qualifying businesses can submit refund requests for tariffs collected under the International Emergency Economic Powers Act (IEEPA), following the court ruling. The process is rolling out in stages, so timing matters.

Eligibility comes down to three questions:

  • Did your business bring goods into the U.S. during the affected period?
  • Was your company the importer of record on those Customs entries?
  • Were the tariffs you paid collected under IEEPA authority?

If the answer to all three is yes, your business may have a refund coming.

 Where things stand today

Right now, the program covers only IEEPA-related tariffs. Other trade duties and tariff programs are not included.

In addition, only two types of entries are covered in this first phase: those still awaiting finalization by Customs, and those that were closed within roughly the last 80 days. More entries are expected to become eligible as additional phases roll out.

 Taking the next step

Refund requests must be filed through the ACE Secure Data Portal, either by your company directly as the importer of record, or through the customs broker who handled the original filing. Because import histories vary, we recommend consulting with a professional who understands the process before you file.

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your unique circumstances.

Does Your Retirement Plan Require an Audit?

by

For many plan sponsors, it starts with a letter.

You receive a notice that your retirement plan now has 100 participants, and you’re required to have an independent audit.

This may be the first you’ve ever heard of an employee benefit plan audit, and here’s what you need to know:

Who needs an employee benefit plan audit?

The Department of Labor (DOL) requires audited financial statements for any retirement plan with 100 or more eligible participants at the beginning of the plan year. Eligible refers to anyone who qualifies to participate, whether or not they’ve actually enrolled in the plan.

Why does the DOL require this?

Your retirement plan holds your employees’ money. And an independent audit ensures that your plan is healthy, having the funds to pay benefits to your participants.

It provides assurance that plan assets are being handled properly, contributions are going in correctly, distributions are being processed and nothing is slipping through the cracks.

What can you expect during the process?

During the audit, a CPA will examine the plan’s financial statements to:

  • Confirm that plan sponsors are fulfilling their fiduciary duty to plan participants
  • Evaluate internal controls and identify any weaknesses
  • Verify that contributions, distributions and loans are being processed in accordance with plan documents and regulations
  • Flag operational errors, compliance issues or potential fraud risks

What happens if you skip an audit?

If your plan qualifies as a large plan (100 or more participants), you cannot file your Form 5500 without an audited financial statement attached.

Miss the filing deadline? DOL penalties start at $2,259 per day. Beyond the financial hit, failing to comply can also expose your company to fiduciary breach claims from participants, meaning personal liability, not just penalties assessed against the plan.

Keep in mind, you may not know you need an audit until after the plan year has already started. For example, your plan year begins January 1st with 105 eligible participants. That triggers the audit requirement — but the audit itself can’t begin until after the plan year closes on December 31st. Your Form 5500 is due July 31st (or October 15th with an extension). If you’re approaching 100 participants, we recommend that you start the conversation with your CPA before you cross that threshold.

If your plan had fewer than 100 eligible participants at the beginning of the prior plan year and filed as a small plan, you may be able to continue filing as a small plan even if you’ve crossed 100, as long as you don’t exceed 120.

This transition period gives growing businesses a little more leeway, but it has specific conditions that you should also discuss with your CPA.

Ensuring a smooth process

Your first employee benefit plan audit may seem daunting, but here are a few things you can do to make go smoothly:

  • Get organized. Pull together your plan documents, investment review records, contribution calculations and any other supporting documentation. More importantly, make sure your plan is operating the way those documents say it should. We’ve found that discrepancies between the written plan and actual practice are one of the most common audit issues.
  • Know what will be tested. Auditors will typically cover contributions, participant data, payroll records, loans, distributions, non-discrimination testing and any prohibited transactions. Have the relevant documentation ready before they ask for it.
  • Loop in your third-party administrator (TPA) and recordkeeper. The audit team will need data from them too, and getting everyone aligned upfront saves a lot of back-and-forth. Having the right people accessible keeps things moving.

A health check for your employee benefit plan

An employee benefit plan audit protects your employees and provides confidence that everything is running the way it should.

The CPAs at Magone & Company can walk you through exactly what to expect. Our team has 30+ years of expertise with employee benefit plan audits across a wide range of industries. Reach out for a free consultation or call (973) 301-2300.

This document is for informational purposes only and should not be considered tax or financial advice. Be sure to consult with a knowledgeable financial or legal advisor for guidance specific to your unique circumstances.