29June
2017
The Utility of Sector Investing

There’s a growing popularity among individuals to broaden their investment strategy beyond the conventional allocation and  investment styles. Some see sector investing as a way to seek new opportunities for enhanced portfolio performance.1.2 Sectors are made up of companies grouped by similar businesses that range from natural resources to financial services and from technology to consumer staples. In any given year, one sector may outperform another. For example, in 2016, energy rose 28% while healthcare fell -2.83%.3 Successful sector investing depends on an individual’s ability to consistently and accurately determine when to rotate in and out of the various sectors,…

29June
2017
Time to Switch Your C Corp to S Corp Status?

Thanks to legislation passed in 2013, the federal income tax rates for individuals remain historically low for single taxpayers with taxable income below $400,000 ($450,000 for married couples filing jointly). That’s the good news. The bad news: The rates for C corporations remain at the same levels that have been in place for years. So you may wonder if you should switch a C corporation to S corporation status? Then, all the company’s taxable income would be passed through to you and the other shareholders and taxed at the relatively favorable rates for individuals. You also wouldn’t have to worry…

29June
2017
Take this Important Estate Planning Step Now

With the federal estate tax exemption at a generous $5.49 million for 2017 (up from $5.45 in 2016) the topic of estate planning may have fallen completely off your radar. After all, you may think there’s no way your estate would lose money if you happen to die between now and the end of 2017, so there’s no need to do anything. Wrong! There is an important estate planning action you should take right now. Check the beneficiary designations for your bank accounts, brokerage firm accounts, tax-favored retirement accounts, company benefit plans, life insurance policies, annuities, and 529 college accounts….

15June
2017
The Importance of Segregating Duties

Small and medium-sized companies are particularly prone to employee theft because they typically don’t have the staff available to assign more than one employee to processes to help ensure that fraud doesn’t take place. Assigning more than one employee to certain tasks, also known as segregating duties, is one of the primary tactics that companies can use to fight internal fraud. The importance of segregating duties can be seen in one fraud case involving a roofing and sheet metal company. Over the course of approximately four years, the company’s administrative assistant and bookkeeper embezzled more than $313,000 using a variety…

15June
2017
The Steps of the FINRA Arbitration Process when an Investor Has a Serious Dispute

Most of the time, investors are satisfied with the relationships they have with their brokers or investment advisors. Occasionally, however, an investor may have a serious dispute about how a broker handled an account. Can the investor file a lawsuit? Probably not. Nearly all brokerage firms have binding arbitration provisions in their client contracts. This is a result of a 1987 Supreme Court ruling that upheld that arbitration agreements in investment firm contracts must be enforced. (Shearson/American Express v. McMahon) So if an investor has a dispute that he or she cannot resolve with the investment firm’s management or through…

15June
2017
Start Succession Planning Now

The majority of North American businesses are family owned and many are facing ownership-transfer issues as the baby-boomer founders enter retirement. On the eve of a retirement, or following a death, family-run businesses have four basic choices. The first two involve giving up a family tradition: closing up shop or selling the business to outsiders or non-family employees. The second two choices involve keeping the business under family control and either hiring outside managers or passing on the business to younger family members. That final option of family succession can be difficult and not every business that attempts it is…

01June
2017
Dynasty Trusts: Step Into The Limelight

You may have seen The Descendants, a popular movie starring George Clooney. In this Oscar-nominated film, Clooney’s character, Matt King, has to make decisions affecting a family trust, which is apparently a “dynasty trust” that holds a large amount of undeveloped land in Hawaii. The decisions affect many people with a stake in the trust and the land. Questions to Answer  To make management of the trust efficient and smooth, and to ensure all points are covered, a grantor must consider: Who will serve as the trustees, advisors, and protectors? Who will the beneficiaries be? How will the trust be…

01June
2017
Converting an Unincorporated Business Into an S Corp

The federal self-employment (SE) tax just keeps going higher and higher. If you’ve reached the breaking point, there may be a way to tame the SE tax beast by converting your existing unincorporated small business into an S corporation. How to Evaluate the Option If you’re a self-employed individual — meaning a sole proprietor, partner, or LLC member — you have to pay the SE tax on your net SE income. The SE tax has two parts: 1. The 12.4% Social Security tax. Social Security tax is due on net SE income up to a certain amount. Unfortunately, the ceiling…

01June
2017
The Problems with Probate

Many people have heard they should avoid probate, but few understand what probate is and how the process works. What Is Probate? Probate is the legal process that wraps up a person’s legal and financial affairs after his or her death. During the probate process a person’s property is identified, cataloged, and appraised. In addition, probate makes certain any outstanding debts and taxes are paid. It can be a complex process, filled with very specific legal requirements. For example, if someone dies without a valid will, the probate court sees that the deceased person’s assets are distributed according to the…