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Kenny & Kenny Best Practices

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Join Tim Kenny, CPA, CMA, CVA on the 2nd Wednesday of each month for an insightful 30-minute webinar on relevant topics for that month.

Can't make it? We record each webinar so you can view it when it's convenient for you. See below for archived episodes.

How to Grow Your Profit with Profit First

January 14, 2026

The Profit First method involves intentionally dividing revenue across different bank accounts, including a profit account. This practice can help business owners create their own profit margin from day one, instead of allowing expenses to grow faster than the business.

Profit First is designed to help business owners:

Take control of cash flow
Pay themselves consistently
Reduce financial stress
Build a sustainably profitable business

Click to open webinar recap

Meeting Purpose

Introduce the Profit First cash flow management system for small businesses.

Key Takeaways

Profit First reverses the formula to Revenue - Profit = Expenses, forcing expense control by allocating profit, owner pay, and taxes first.

The system uses five bank accounts (Income, Profit, Owner Pay, Taxes, OPEX) to create financial boundaries and prevent overspending.

A second bank holds Profit & Tax funds, removing them from daily view to prevent temptation and ensure money is available for quarterly distributions and tax payments.

Profit First is a behavior-based system that uses quarterly rewards (the profit distribution) to reinforce discipline and make the process sustainable.

Topics

The Problem: Traditional Cash Flow Management

The traditional formula (Sales - Expense = Profit) is flawed, treating profit as a hopeful outcome instead of a planned one.

This leads to a "grow, spend, grow, spend" cycle, constant cash flow pressure, and owners who are underpaid or unpaid.

The system leverages Parkinson's Law (demand rises to the level of the resource): without intentional allocation, revenue will be spent.

The Solution: Profit First System

Core Principle: Reverse the formula to Revenue - Profit = Expenses.

Method: Allocate revenue to dedicated accounts in a specific order:

Profit: Set aside first.
Owner Pay: Compensate the owner for their risk and work.
Taxes: Proactively save for tax obligations.
OPEX: Pay all operating expenses with the remainder.

Account Structure:

Income Account: The "serving tray" where all revenue is initially deposited.
Four Allocation Accounts: Profit, Owner Pay, Taxes, and OPEX.
Second Bank: The Profit and Tax accounts are held at a separate bank.
- Rationale: Removes these funds from the owner's daily view, preventing temptation to use them for operating expenses and ensuring they are available for their intended purpose.

Implementation & Mechanics

Allocation Frequency:
- Recommended: Twice monthly (10th & 25th) or weekly ("Money Mondays") to establish a consistent rhythm.

Profit Distributions:

Timing: Quarterly.
Purpose: A reward for discipline. Even small distributions should be used for something personally meaningful to reinforce the positive behavior.

Tax Account Management:

Function: Proactively saves for estimated taxes, eliminating end-of-year financial surprises.
Outcome: Any year-end surplus in the tax account becomes an additional profit distribution.

Debt Management:

Compatibility: Profit First is effective for businesses with debt.
Method: Allocate a portion of the quarterly profit distribution (e.g., 90%) to debt repayment while still taking a small personal reward (e.g., 10%) to maintain motivation.

Next Steps

Timothy Kenny:

Provide a recording of the webinar to all participants.

Attendees:

Book a free consultation via the QR code to discuss deploying Profit First in their business.

Big, Beautiful Ways to End the Year

December 10, 2025

With another look at the "One Big Beautiful Bill," Kenny & Kenny has produced this year-end webinar to focus on ways you can take advantage of new tax strategies to save on your tax bill in April!

Tax Cuts & Exemptions
Business & Investment Incentives
Temporary & Niche Provisions
Permanent & Expiring Provisions
Pro Tip - ID.me - IRS Online Account Creation

Click to open webinar recap

Meeting Purpose

Reviewing year-end tax changes and planning strategies.

Key Takeaways

The "Big Beautiful Bill" extended 2017 tax cuts, preventing a tax hike for most; a $40k income would have seen a 41% increase.
Key business breaks were restored, including 100% bonus depreciation (retroactive to Jan 19, 2025) and an expanded Section 179 cap of $2.5M.
New temporary breaks include tax-exempt tip income (up to $25k) and the premium portion of overtime pay, both for 2025–2028.
A new "Trump account" for children born in 2025 starts with a $1k government contribution and grows tax-deferred.

Topics

Tax Cuts & Extensions

2017 Tax Act Rate Extensions: Made permanent, preventing a tax hike.
- Impact: A $40k income would have seen a 41% tax increase; a $1M income, a 9% increase.
Standard Deduction: Permanently doubled.
- Single: $6,350 → $12,000
- MFJ: $12,700 → $24,000
Child Tax Credit: Permanently doubled to $2,000.
- Boost: $2,200 for 2025–2028.
- Non-Child Dependent Credit: $500.

Business & Investment Incentives

Depreciation: Restored to encourage business investment.
Qualified Business Income (QBI) Deduction: 20% deduction extended for pass-throughs.
- Rationale: Offsets the C-Corp rate cut (35% → 21%).
- Phase-out: Begins at $191,950 (Single) / $383,900 (MFJ) taxable income.
Qualified Opportunity Zones: Extended.
- Benefit: Exclude 100% of capital gains on investments held >10 years.

New Temporary & Niche Provisions

SALT Deduction Cap: Raised to $40,000 for 2025–2029.
- Phase-out: Begins at >$500k AGI.
Tip Income Exemption: Up to $25,000 exempt from income tax (2025–2028).
- Phase-out: Begins at >$150k AGI (Single) / >$300k AGI (MFJ).
- Note: Still subject to payroll tax.
Overtime Pay Exemption: The premium portion of overtime pay is tax-exempt (2025–2028).
- Example: For a $20/hr base rate, only the $10 premium portion of a $30/hr overtime rate is exempt.
- Employer Action: Report premium pay in W-2 Box 14 or via a separate statement by Jan 31, 2026.
Senior Standard Deduction: New "kicker" for filers 65+.
- Single: +$6,000
- MFJ: +$12,000
Car Loan Interest Deduction: Up to $10,000 deductible above-the-line.
- Phase-out: Begins at >$100k AGI (Single) / >$200k AGI (MFJ).
Gambling Loss Limitation: Losses are now limited to 90% of winnings.
- Impact: A $100k win and $100k loss results in $10k of taxable income.
529 Accounts: K-12 education expense limit increased to $20,000.
"Trump Accounts": New for children born in 2025.

Permanent & Expiring Provisions

Estate Tax Exemption: Permanently extended at its current level (prevents a cut from ~$14M to ~$7M).
Qualified Small Business Stock (QSBS): Gain exclusion (up to $10M or 10x basis) extended.
EV Tax Credit: Expires Sep 30, 2025.
Solar Tax Credit: Expires Dec 31, 2025.

Q&A: Business Vehicle Use

Q: Can a personal car used for business qualify for Section 179?
A: Yes, if business use exceeds 50%. The personal use portion is valued via IRS tables and added to the employee's W-2. If business use drops below 50%, the Section 179 benefit must be recaptured.

Pro Tip: IRS Online Account

Recommendation: Create an IRS online account for direct access to transcripts, payment history, and notices.
Rationale: Avoids long IRS phone wait times (e.g., 1+ hours) and provides real-time data.
Setup: Requires an ID.me account for secure access.
- Process: Use a government-issued ID, a camera-enabled device, and a reliable internet connection.
- Support: The firm can assist with setup if needed.

Next Steps

Business Owners:
- Identify and report overtime premium pay in W-2 Box 14 or a separate statement by Jan 31, 2026.
- Evaluate 100% bonus depreciation for equipment purchased since Jan 19, 2025.
Individuals:
All:
- Contact the firm for a detailed tax estimate to determine the impact of new provisions.

2026 Coming Attractions

Stay tuned for our 2026 Best Practices Webinar Series topics!

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Kenny & Kenny P.C.

1400 W. 47th Street, Suite 4 LaGrange, IL 60525

708-386-0600 FAX: 708-639-4438

[email protected]

Kenny & Kenny Best Practices

Webinar Series

How to Grow Your Profit with Profit First

January 14, 2026

Click to open webinar recap

Meeting Purpose

Key Takeaways

Topics

The Problem: Traditional Cash Flow Management

The Solution: Profit First System

Implementation & Mechanics

Next Steps

Big, Beautiful Ways to End the Year

December 10, 2025

Click to open webinar recap

Meeting Purpose

Key Takeaways

Topics

Tax Cuts & Extensions

Business & Investment Incentives

New Temporary & Niche Provisions

Permanent & Expiring Provisions

Q&A: Business Vehicle Use

Pro Tip: IRS Online Account

Next Steps

2026 Coming Attractions

Visit our Webinar Archive

Let's Talk!

Kenny & Kenny P.C.

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