August 2013

Avoid six common mistakes in selling a business

Most entrepreneurs eventually think about selling their businesses, whether as a prelude to retirement or to pursue other activities. In doing so, they often underestimate the effort required for a satisfactory outcome and overestimate the value and salability of their enterprises. If you’re contemplating selling, here are some common mistakes to avoid. 1. Overestimating the value of your business. Your price should be based on the fair market value of the business in its current form.

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Make your plan accountable for best tax treatment

Are you looking for a way to give your employees a tax-free benefit that is also tax-deductible for your business? Why not consider an accountable plan? An accountable plan is an arrangement that lets you reimburse your employees for expenses incurred on behalf of your company, such as driving to the post office or supply store. With a properly administered plan, you can deduct the reimbursements on your business tax return; yet the payments are not

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Tax filing reminders

—  September 16 – Third quarter installment of 2013 individual estimated income tax is due. —  September 16 – Filing deadline for 2012 tax returns for calendar-year corporations that received an automatic extension of the March 15 filing deadline. —  September 16 – Filing deadline for 2012 partnership tax returns that received an extension of the April 15 filing deadline. —  October 1 – Generally, the deadline for businesses to adopt a SIMPLE retirement plan for

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If my trust is being dissolved and I am getting a portion (using present value calculations) will I be taxed?

  ADDITIONAL INFORMATION: I normally pay taxes on the income of the trust. I don’t have access to the principle amount but my trustees have determined based on life expectancy and actuary tables that I can have a lump sum distribution. I was not given any documentation for the finances and I would like to confirm the amount is correct but my question is will I be taxed on that distribution (under $100K) and can I

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Power of Attorney

ADDITIONAL INFORMATION: My husband had a stroke a year ago. We have no will. He can’t write and his speak isn’t very well. My question is can he make me power of attorney if he can only make an x? Would that be legally binding? ATTORNEY ANSWER BY MARGARET L. CROSS: Yes, your husband can execute a power of attorney provided he understands what he is executing and wishes to do so. He can make his

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Can my step father hold me accountable for past mortgage payments if I wasn’t informed that I inherited land through intestacy?

ADDITIONAL INFORMATION: My mother passed away 8 years ago… I was told she left me nothing. Last month my step father contacted me saying he needed me to sign some some papers for him. When I asked what they were for he told me it was my mothers estate, but assured me it wasn’t worth anything. It seemed weird to me so I had his attorney send me the paperwork and discovered I had received her

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Look into energy credits

The IRS reminds taxpayers that certain energy credits are still available. If you haven’t already taken advantage of them, this may be the year to make energy-efficient improvements to your home. You may be entitled to a credit of 10% of the cost of certain energy-saving improvements such as insulation, windows, doors, skylights, and roofs. The credit has a maximum lifetime limit of $500; the credit for windows is limited to $200. Not all energy improvements

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Can happy employees equal healthy profits?

It is said that living by the Golden Rule – treating others as you would like to be treated – pays dividends. Can this be true in a small business work environment too? Business owners are increasingly finding that treating employees well can boost profits. Creating a contented workforce is simply a matter of maintaining your most precious business asset. This can benefit your company in three ways. First, it lowers employee turnover, which in turn

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Medicare taxes can be harmful to your financial health

Two new Medicare taxes will inflict pain on the wallets of many higher-earning taxpayers, especially those with significant investment income. Knowing how these taxes are calculated might be your best remedy. Single wage earners will have to pay an additional 0.9% Medicare tax on any pay exceeding $200,000. This is on top of the 1.45% tax already owed under the previous rules. Joint filers will pay the extra 0.9% on combined wages exceeding $250,000. Your employer

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IRS publishes 2014 HSA contribution limits

The IRS recently announced the inflation-adjusted contribution limits for health savings accounts (HSAs) for 2014. HSAs allow taxpayers with high-deductible health insurance plans to set aside pretax dollars that can be withdrawn tax-free to pay unreimbursed medical expenses. The 2014 contribution limit for individuals is $3,300; the limit for family coverage is $6,550. A catch-up contribution of an additional $1,000 is permitted for individuals who are 55 or older.

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