Maximize the Potential of Your Business Clients

Without a doubt, establishing and maintaining retirement benefits are important for all of your business owner clients. Fortunately, we practitioners now have greater options than ever before to help our clients. Current customized specialty programs are more efficient, provide greater benefits and are now possible since the passage of the Economic Growth and Tax Relief Reconciliation Act of 2001 followed by the Pension Protection Act. When done correctly, these plans can reduce taxes and provide future benefits. If done incorrectly, they may bring IRS scrutiny, among other problems. To avoid unwanted issues, you may want to consider some of the following plans available to business clients.

Qualified Retirement Plans; Qualified retirement plans are particularly suitable for small business owners who are in high-income tax brackets because they are fully deductible from ordinary income taxes to the business owner. This may also serve as a solution to the looming Alternative Minimum Tax (AMT) issue because they are not a tax-preference item.

Cash Balance Plans; Cash balance plans have been used to reduce the cost of employee benefits and can now be capitalized on to a greater extent since the passing of the Pension Protection Act. Cash balance plans offer employers advantages not available with other qualified plans. For example, small business owners can make large defined benefit-sized contributions with small 401(k)-sized costs for the employees. They can be used when employee cost is too large to make a traditional defined benefit plan appealing to the owner(s). When designed properly, the owner(s) contributions can exceed $100,000 per year and can even exceed their salary. A cash balance plan can be combined with a 401(k). A properly designed cash balance plan can make 90 percent of the contributions and benefits available to the owner(s) and/or preferred participants.

Self-employed Individual and Partnership Plans; Self-employed individuals and partnerships consisting of only owners and their spouses (i.e., no common law, non-owner employees) should consider the Micro (K) ®. For example, a one person S Corporation in which the sole owner has $116,000 of compensation paid on IRS Form W-2 can receive 25 percent of eligible payroll as an employer deductible contribution. Then the owner, as an employee, can defer salary up to $15,000 (2006 limit). Consequently, a W-2 $116,000 salary results in an allowable deductible contribution of $44,000. The calculation for a business entity that is not taxed as a corporation (no W-2 compensation) is not so simple, but the results are somewhat similar. This plan can also make life insurance tax deductible, if desired. Additionally, up to $50,000 can be borrowed from the plan.

Small Business Plans; Many small business clients have used a SEP-IRA or basic profit sharing plan for their retirement needs due to the simplicity and low cost of these designs. However, recent favorable tax law changes have made these designs less effective. Worse yet, if you have any eligible employees, these may be among the most expensive plans to fully fund. A Dash 401(k) is a much better alternative. One of the many benefits is a substantially lower employee cost. Unlike a SEP-IRA, a Dash 401(k) will allow you to borrow up to $50,000 from the plan. This allows a business owner to make the greatest possible contribution without tying up all of his money until retirement. The plan allows life insurance to be deducted, if it is needed. The Dash 401(k) is flexible.

For example, a business owner with a $100,000 W-2 wage has a staff member earning $40,000 in W-2 income while another staff member earns $25,000 in W-2 income. The Dash 401(k) would allow the owner a contribution of $45,000, while the workers’ contributions would be $2,000 and $1,250, respectively. This is a great way to maximize your business clients’ income and retirement security potential.

Additional Plan Options – If your client has a C Corporation and wants to get money out while obtaining a deduction, a §162 executive bonus plan could be considered. With this option money taken out of the corporation is a deduction. The plan can be discriminatory and the money can take the form of a bonus to the owner and/or key executive.

With these or any other type of plans, business owners must be careful when choosing a tax advisor. We are constantly called to help when a business owner runs into trouble. Many investment providers have entered the market with little emphasis on administration. A document may be provided, but no effort is made to monitor the calculation of allowable contributions. In addition, there is no built-in method for dealing with non-owner common law employees who are hired, or are improperly excluded because they are considered part-time or independent contractors. Many plans, especially 401(k) and profit sharing plans, quickly run unfavorably for reasons such as:

• Improperly excluded part-time employees.
• Improperly timed salary deferral elections and deposits
• Incorrectly calculated profit sharing contributions
• Incorrectly calculated loan amounts.
• Improperly managed loan repayment schedules.
• Incorrectly calculated incidental life insurance premiums.
• Improperly timed salary deferral elections and deposits.
• Improperly excluded newly eligible non-owner participants.
• Failure to make top-heavy minimum contributions.

The IRS, Department of Labor, and other regulators have increased enforcement and penalties. Some popular plans currently being sold are considered potentially abusive tax shelters, even putting the accountant at risk for penalties.
Remember, the time to handle potential problems is before they happen.

Bad Credit Car Loans Steadily Gaining Popularity Amidst Economic Stagnation

Personal loans are common across the society since the historic times. These can be broadly categorized as secured and unsecured personal loans. It is easier for everyone to avail unsecured personal loans as compared to the secured ones. The sum of money involved in this category of transactions is usually petite, ranging between hardly a few hundred dollars at the most. In order to avail the type of facility, a borrower, usually, does not need to put up any asset as collateral. As such, the individual’s credit score is hardly taken into account while providing the facility. However, in some instances, lenders charge higher interest rates to borrowers with dismal credit scores, on availing unsecured personal loans.

On the other hand, to avail secured personal loans, borrowers need to put up some asset or the other as collateral. As such, rate of interest involved in this range of loans is usually more reasonable as compared to the other variety. Because of the collateral asset, lenders offer secured personal loans at lower interest rates. Thankfully, both the types of loan allow monthly installments to borrowers to repay the money. In a recent development, a range of registered money lending agencies is readily providing loan to people with bad credit. To avail the unique facility, however, one has to own the clear title of a car, truck, van or SUV. The amount of money disbursed as loan is determined by the condition of a vehicle in question.

The range of loans is steadily gaining prominence and is facilitating life for scores of people by resolving their small economic needs. The unique monetary facility is more popularly called bad credit car loans. Stagnant economy is compelling the corporate sector to downsize its workforce. Lay-offs, unemployment and pink slips are rampant across the industrial domains these days. In short, innumerable folks are suffering from low credit score. Conventional lenders refuse to give loans to these people for obvious reasons. Actually, these folks invariably fail to meet the eligibility criteria of the conventional lenders. Thus, it is indeed an uphill task for these people to secure money to combat unforeseen emergencies.

The best part about vehicle equity loans is it allows users to keep and maintain their vehicles during the loan period. Volume of business for the category of lenders is increasing at an exponential pace. An increasing number of folks who need cash on bad credit unhesitatingly approach these unconventional money lenders. Professionals working in these financial establishments maintain impressive level of professionalism and never reveal their clients’ identities to third-parties.

When the loan is repaid on time, a negligible sum is levied as interest. There is no penalty on early repayment of these loans. As there is no credit check, money is handed over fast to borrowers while availing loans with bad credit. In fact, money is handed over hardly within a few hours of filling the loan application. While availing such facility, it is advisable for the borrower to carry a photocopy of the driving license and a few other relevant documents. However, professionals working in these money lending agencies will definitely provide extensive list of documents that borrowers need to furnish well in advance.

Arjun Das Gupta is a prominent online blogger who conducts extensive research on bad credit car loans in Canada and surrounding areas. According to him, these are the best tools for folks who need cash on bad credit.

Business Credit Building Initial Essentials

Before you start applying for business credit, make sure you take the time to verify that all agencies, banks, and trade credit vendors have your business listed with the same Tax ID number.

Business address must be a real brick-and-mortar building, deliverable physical address cannot be a home address, cannot be a PO Box, and cannot be a UPS address. Some lenders will not approve and fund unless this criteria is met.

You must have a dedicated business phone number that is listed with 411 directory assistance, under the business name. Lenders, vendors, creditors, and even insurance providers will verify that your business is listed with 411.

You MUST use a business phone number, not a home or cell phone.You should get an 800 number and fax number. Voice over IP numbers are okay, you just can’t use a home phone or cell phone.

Credit providers will research your company on the internet and it is best if they learned everything directly from your company website. You should also have a professional email address such as.

These are super cheap and easy to setup. Not having either WILL make you look not credible.

You’ll need to contact the State, County, and City Government offices to see if there are any required licenses and permits to operate your type of business. Do not apply if you are unlicensed when you should be.

Take the time to verify that main agencies (State, IRS, Bank, and 411 national directory) have your business listed the same way and with your Exact Legal Name. Also take the time to ensure every bill you get (power bill, phone bill, landlord, etc.) has the business name listed correctly and comes to the business address.

Those accounts will then report to the business reporting agencies in 30-90 days or up to three reporting cycles.

Once reported you’ll then have a business credit profile. You’ll have a good business credit score as long as you paid your bills on time.

And you’ll have multiple tradelines.You’ll need to have five reported accounts to move on and start getting store credit, the next step in building business credit.

A vendor line of credit is when a company (vendor) extends a line of credit to your business on “Net 15, 30, 60 or 90” day terms. This means that you can purchase their products or services up to a maximum dollar amount and you have 15, 30, 60 or 90 days to pay the bill in full.

So if you’re set-up on Net 30 terms and were to purchase $300 worth of goods today, then that $300 is due within the next 30 days.

Contact us today to learn more about building credit for your business!

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The Truths About Estate Planning That You Need To Know

Do you have financial goals? Of course you do. Everyone has some financial goal they would like to reach. Maybe your goal is to provide for all of your family’s needs. Maybe you are looking at traveling. Retirement might be on your mind. However, there is one financial goal that many seem to neglect. Many ignore the need to save and ensure assets that will keep their family from dealing with a huge financial burden should something happen.

Unfortunately, some people believe that having only assets in the market is a safe way to go. This isn’t a good strategy, as the wellbeing of the future is in the hands of how the market is going at the time. If it drops unexpectedly, or something happens and at the time the market isn’t up, you may be looking at a huge problem.

In 2008 there was a major financial crisis. It was considered to be one of the greatest financial crises since the Great Depression. The housing market suffered, resulting in evictions and foreclosures. There was a period of prolonged unemployment. The crisis played a significant role in the failure of key businesses. It costs an estimated trillions of U.S. dollars.

Now imagine that you were asset rich, but monetarily poor during this time. Imagine something happened to you. You were in a car crash, a house fire broke out, or some other (Heaven forbid) tragedy. It’s hard to imagine, but things do happen. We often think, “not me,” but the reality is that it could very easily be you. In October of 2008, when the financial crisis happened, all assets were reduced by 30% to as much as 50%. The values of assets were reduced, but the debts remained the same. If something were to happen to you during this time, your family would have a financial gap to manage.

At this point we can all agree; it is important to plan for unexpected circumstances and to avoid putting all of our savings into market assets. With that having been said, many people have either never heard of Estate Planning, or don’t know the great possibilities that come with it.

It is vital to go through the process of Estate Planning. It is a planning process to ensure that assets exceed debts, and to transfer the net assets to the loved ones in a smooth, and easy process. It is one of the best plans to avoid any delay in meeting the financial needs of the loved ones should something bad occur. Proper planning will minimize unnecessary costs such as legal, admin, and accounting costs. Why pay more when you can pay less through Estate Planning?

Estate Planning serves to avoid the 2Cs:

Avoid confusion

If all you have is assets, there is a good chance that your family will be confused with the outstanding debts versus the assets available. Not to mention, if the values of your assets are reduced because of market situation, it will only cause more confusion. With proper planning, the right beneficiaries will receive the financial inheritance that you desire to pass on.

Avoid conflicts

We have all heard of or seen the family that becomes divided because of inheritance passed down from the deceased. Estate Planning will work around any conflicts that can arise because of “assumed inheritance.”

Estate Planning is for everyone, as long as you have something to pass on to your loved ones. It can be a HDB flat, CPF monies, insurance payouts, or cash in the bank. It takes great planning to avoid the 2Cs that can become a burden to our loved ones. Plan for your loved ones to avoid the uncertainties.