28July
2016
How Financial Advisors are Compensated

The fees that investors pay to financial advisors for their advice and services come in two basic forms: transaction fees and ongoing fees. While advisors may differ in what fees they charge, they are required to fully disclose them. Transaction Fees   These fees are generally one-time fees assessed when a transaction is made. Examples of transaction fees include: Commissions Paid on the purchase and sale of a stock.¹ Mark Ups / Mark Downs Occurs when a broker-dealer sells or buys an investor a position that it owns. FINRA guidelines ensure the prices paid by investors are reasonably related to…

28July
2016
Sell (or Buy) a Corporate Business With a Tax-Free Reorganization

There are two basic ways to sell an incorporated business — sell the assets or sell the stock. For two good tax reasons, sellers usually prefer stock sales:       1. Assuming you’ve owned the shares for more than a year, your profits will generally be taxed at a maximum federal rate of 20 percent.* This applies equally to C and S corporations 2. Double taxation is avoided when you sell C corporation stock, because the sale won’t trigger any taxable gain at the corporate level. However, there may be an even better alternative. If you can find another corporation to acquire your C…

28July
2016
A Tax-Smart Strategy: Hire Your Spouse

If you are married and run your business as a sole proprietorship (or as a single-member LLC treated as a sole proprietorship for federal tax purposes), it can be a tax-smart move to hire your spouse as an employee. Then, provide most or all of his or her compensation in the form of payments from a medical expense reimbursement plan set up for your business. These plans are often referred to as “Section 105 Plans.” By using a Section 105 plan compensation strategy, you can claim business write-offs — on Schedule C of your Form 1040 — for the reimbursements…