24September
2015
Foreign Ownership of U.S. Debt

Would it surprise you to hear that China owns only about 7% of the total outstanding debt of the U.S. Government?¹ This still amounts to about $1.25 trillion, but China’s ownership of Treasury securities is well behind two major domestic owners — Social Security and the Federal Reserve.² Nevertheless, the emergence of a political and economic competitor on the world stage as a major owner of U.S. debt has unsettled some policymakers and citizens alike. The Anatomy of Ownership Chinese ownership of U.S. debt is primarily due to its exchange-rate policy, which fixes the value of its currency to the…

24September
2015
Choosing the Right Legal Form for Your Business

Choosing the appropriate legal form for a business is one of the first issues most entrepreneurs face. It is an important decision at the formation stage and also as a business grows. Sole proprietorships are generally the easiest. Corporations offer some different advantages, but often with additional complexity. This article addresses some of the pros and cons of different types of legal structures for businesses. Even if your enterprise has been in existence for a while, it may be time to review your options. There can be many complexities in determining the best legal structure and a qualified attorney may be…

24September
2015
Why You Need a Buy-Sell Agreement

If you co-own a business with other family members, it’s generally a good idea to have a well-drafted buy-sell agreement to protect everyone’s interests. Here are some basics about this important document, including the valuation methods used. There are two basic varieties of buy-sell agreements. The first type is a contract between the parties to have remaining co-owners buy out the interest of a withdrawing co-owner. This arrangement is called a cross-purchase agreement. Alternatively, the agreement can be between the business entity and all the co-owners to have the entity buy back a withdrawing co-owner’s interest. This is called a…

10September
2015
Fight Internal Fraud With 8 Precautions

When you read in the paper that a “trusted employee” has been charged with embezzlement, it can be shocking. But then, of course, it makes sense because the theft involved a trusted employee. An employee who isn’t trusted doesn’t have much of a chance to commit fraud. How can you ensure that internal fraud doesn’t happen in your business? Distrusting everyone certainly isn’t the answer. You need to implement and monitor internal controls and procedures to make sure that employees don’t have an opportunity to steal. Duties should be segregated so that no one employee is able to commit fraud…

10September
2015
Higher-Income Taxpayers: Open the Door to a Roth IRA

If you expect to be in a relatively high tax bracket during your retirement years, you should consider pumping as much money as you can into Roth IRAs. However, your ability to make annual Roth contributions may be reduced or eliminated by a phase-out rule that affects high-income individuals. Good news: You can circumvent the phase-out rule by making an annual non-deductible contribution to a traditional IRA and then converting the account into a Roth IRA. This article explains that strategy after first covering some basics about Roth IRAs and the contribution rules that apply to them. Making Annual Roth…

10September
2015
Consider Hosting a Family Meeting about Your Estate Plan

If you’re a business owner and a high-net-worth individual, you may want to gather your family members together to discuss the details of your estate plan. This can be especially important if you own a business that employs family members. These meetings are a little like the Scottish clan gatherings held hundreds of years ago by clan chiefs to discuss their succession and inheritance plans. The Purpose of Gatherings For centuries, some Scottish clans had a tradition of getting together periodically. When communication and travel were difficult, these gatherings provided a way to prepare for the future. Estate planning was…