22April
2019
Minimize Legal Risk During Internal Investigations

Let’s say an employee tips you off that some payments to a vendor seem suspicious. After looking into it, your company discovers that $60,000 in payments were all authorized by one employee and no one else in the purchasing department has heard of the vendor. You become concerned about fraud. What should you do? Clearly, you need to start some sort of investigation to determine if there is fraudulent activity going on. You might think it’s best to hand the matter over to the HR department and let them look into the matter from every angle but that could be…

22April
2019
Estate Planning: Check Your Beneficiary Designations

Regardless of your income or net worth, there’s one estate planning move you should probably make right now: Check the beneficiary designations for your life insurance policies, bank accounts, brokerage firm accounts, retirement accounts, and other assets. If you’ve not yet turned in the proper forms to designate beneficiaries, do it now. If your forms are out of date, update them. The consequences of failing to take these simple steps can be serious. If you don’t believe it, consider the following real-life horror stories. Horror Story Number 1 In Herring v. Campbell, the Fifth Circuit Court of Appeals ruled that…

22April
2019
Keep Family Employees in Line

Running a successful family business can often be more difficult than running a non-family business because the dynamics of management are blurred. A Family or a Business? Family-run companies can slide into trouble when owners don’t differentiate between what’s acceptable in the family and what’s acceptable for the business. A common question that needs to be answered: Do you have a family-first business or a business-first family? A paternalistic culture can lead to management that is based more on consensus than on performance and action. To ensure that your family-run business operates efficiently, set up performance standards that every working…

04April
2019
Seven Non-Tax Reasons to Create a Trust

Using trusts as an estate planning tool is often done to achieve tax savings. By setting up certain types of trusts, a high-net-worth individual can avoid exposure to estate taxes levied by the federal and state governments. While this an important consideration if your estate is likely to be liable for death taxes, there are many other reasons to create a trust. Here are seven reasons that are not estate-tax driven: 1. To Avoid Probate or Estate Administration. Assets in a trust don’t go through probate or an estate administration, the court-supervised process for distributing the assets. (Probate is when…

04April
2019
Understanding IRS Audit Guidance

IRS examiners usually do their homework before meeting with taxpayers and their professional representatives. This includes reviewing any relevant Audit Techniques Guides (ATGs) that typically focus on a specific industry or audit-prone business transaction. Though designed to help IRS examiners prepare for audits, ATGs are available to the public. So, small business taxpayers can review them, too — and gain valuable insights into issues that might surface during audits. Auditor Specialization In the past, IRS examiners were randomly assigned to audit taxpayers from all walks of life, with no real continuity or common thread. For example, after an examiner audited…

04April
2019
Estate Management Checklist

Effective Estate Planning requires attention to a number of important details. The following checklist will get you started developing an estate management plan. Consult with your professional adviser after reviewing the following questions. 1. Do you have a will? A will enables you to specify who you want to inherit your property and other assets. A will also enables you to name a guardian for your minor children. 2. Do you have healthcare documents in place? Healthcare documents spell out your wishes for health care if you become unable to make medical decisions for yourself. They also authorize a person…

21March
2019
Negotiating a Commercial Lease

A commercial real estate lease, like any other contract, can be negotiated. But don’t use or accept a form lease. The lease should be constructed in a way that you obtain the maximum legal, economic and tax advantages. Keep in mind that any ambiguities in the lease are usually construed by the courts against the person who drew it — in many cases, the landlord. Get qualified legal advice before signing any contract. To fully and adequately protect your rights, here are eight important considerations in a lease: 1.  A tenant can move in and start paying rent after: A certificate of occupancy has…

21March
2019
Hey, That’s A Brilliant Idea!

It is called the Japanese miracle — the kaizen teian — and the concept successfully provides a way for employees to propose more efficient ways to work.  Today, this variation of the suggestion box can be found at many American companies. Yet despite the proven effectiveness of these suggestion programs, it’s estimated that only 7% of U.S. companies use them. In many companies without programs, employees feel their suggestions fall into a black hole. Managers may think some ideas are mediocre or frivolous and the overall consensus is that creativity simply isn’t encouraged. But before you dismiss ideas that come…

21March
2019
Build a Strong Board

A strong board of directors provides financial guidance to a company, develops long-term priorities and elects executives to run the operation. To accomplish these goals, directors need to meet frequently and take an objective look at how the business is being run. Yet in family-owned companies, this is rarely the case. Here are some telling results from an American family business survey* of 1,143 firms: Number of Meetings a Year None 13.4% One to two 49.3% Three to four 19.2% Five or more 10.1% *Survey conducted by the George & Robin Raymond Family Business Institute and the MassMutual Financial Group….

07March
2019
When Dollar-Cost Averaging Makes Sense … and Doesn’t

The benefits of dollar-cost averaging (DCA) are generally extolled by market commentators and investment providers. But this well-regarded strategy may not always be the best approach for individual investors.1 What is Dollar-Cost Averaging? Dollar-cost averaging is the practice of buying a fixed-dollar amount of a particular investment on a regular schedule over a period of time. The primary advantage of DCA is that an investor buys fewer shares when the price is higher and more shares when the price is lower, which can mean a lower average cost over time. Keep in mind that DCA does not protect against a…

07March
2019
LLC: A Blueprint to Limit Liability and Cut Taxes

There is generally no one legal structure that works best for all businesses. The most favorable choice depends on a number of factors, including the number of owners, your tax situation and whether or not you have employees. A limited liability company (LLC) may be a good choice because it provides flexibility, low maintenance, favorable tax treatment and most importantly, limited liability protection to keep your personal assets safe. A properly-organized LLC combines some of the aspects of partnerships and corporations into one entity. For example, general partnerships and sole proprietorships generally have no insulation from liability. But by statute,…

07March
2019
Succeeding At Business Succession

Inc magazine reported that sixty-six percent of small-business owners have no formal succession plan.1 While the number may shock you, it probably doesn’t surprise you since so many small business owners are consumed by the myriad responsibilities of running their businesses. Nevertheless, owners ignore succession planning at their peril, and possibly at the peril of their heirs. There a number of reasons for business owners to consider a business succession plan soon. Let’s take a look at two of them. Estate Tax Bill The first reason is taxes. Upon the owner’s death, estate taxes may be due that a proactive…

21February
2019
Six Red Flags of Financial Statement Fraud

Many incidents of fraud are discovered inadvertently. For example, a staff member may notice something that doesn’t seem right and mentions it to a manager. Upon investigation, internal theft is found. But considering the potential damage that fraud can inflict on a company, it is obviously better to do more than depend on mere chance. Keep in mind that the earlier a company detects fraudulent activity, the less damage will be done. With that in mind, here are six red flags that can suggest wrongdoing in your workplace: 1. Unfair practice charges. If your company is sued and the lawsuit…

21February
2019
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…

21February
2019
Sell the Family Business the Tax-Smart Way

When the owners of a family business are ready to sell, there are numerous considerations. One of the most important is handling the sale in a tax-wise manner. In most cases, the buyer wants to make a direct purchase of the business’s assets — as opposed to buying all the ownership interests in the legal entity used to conduct the business. A direct asset purchase allows the buyer to “step up” the tax basis of the acquired assets to reflect the purchase price. That means bigger post-purchase tax write-offs for depreciation, amortization, cost of goods sold and so forth. A…

07February
2019
Save on Taxes While Doing Good

If you own assets that have appreciated significantly over the years, you may be able to profit more by giving them away than by selling them. By setting up a charitable remainder trust (CRT), you can transform a future tax liability into a current tax break, receive a steady source of income for the rest of your life and leave a gift to your favorite charity. Here’s how it works. Let’s say you invested $50,000 years ago in a stock now worth $350,000. One option is to sell the stock now and use the proceeds to help finance your retirement….

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