Looking to expand? Is your business growing suddenly? Business expansion has two aspects. One is planned and carefully managed expansion at the business owner’s initiative. The other, is sudden expansion. Careful management of such good fortune may be even more vital than planned growth. Growth causes a variety of changes, all of which present different managerial, legal, and financial challenges. There are several strategies to make the growth process successful, let us help guide you through them.
Business Sales and Acquisitions
If you decided to buy, sell or acquire a business, we’ve got the right knowledge and resources to help. An acquisition is a corporate action in which a company buys most, if not all, of the target company’s ownership stakes to assume control of the target firm. Acquisitions are often made as part of a company’s growth strategy when it is more beneficial to take over an existing firm’s operations and niche compared to expanding on its own. Acquisitions are often paid in cash, the acquiring company’s stock or a combination of both.
Divorce tax planning
If you’re going through a divorce, you tax return will be affected. Whether you’re structuring a property settlement, choosing how to split up retirement savings or what your filing status is, we can help make the transition easier.
A few things to consider:
- Filing Status Couples who are splitting up but not yet divorced before the end of the year still have the option of filing a joint return. It’s when your divorce decree becomes final that you lose the joint return option.
- Exemptions for Dependents You can continue to claim your child as a dependent on your tax return if the divorce decree names you as the custodial parent.
- Medical Expenses If you continue to pay a child’s medical bills after the divorce, you can include those costs in your medical expense deductions even if your ex-spouse has custody of the child and claims the dependency exemption.
- Tax Credits You can continue to claim the child-care credit for work-related expenses you incur to care for a child under age 13, if you have custody even if your ex gets to claim the dependency exemption.
- Payments to an Ex If you’re the spouse who is paying alimony, you can take a tax deduction for the payments, even if you don’t itemize deductions. The opposite is true for child support: The payer doesn’t get a deduction and the recipient doesn’t pay income tax.
- Asset Transfers When a divorce settlement shifts property from one spouse to another, the recipient doesn’t pay tax on that transfer.
- Home Sales If, as part of your divorce, you and your ex decide to sell your home, that decision may have capital-gains tax implications. Normally, the law allows you to avoid tax on the first $250,000 of gain on the sale of your primary home if you have owned the home and lived there at least two years out of the last five. Married couples filing jointly can exclude up to $500,000 as long as either one has owned the residence and both used it as a primary home for at least two out of the last five years.
- Transfer of Retirement Assets Handle your retirement savings with care in a divorce. If you cash out a 401(k) plan to give the money to your ex, for example, the IRS considers that a taxable distribution, and you’ll be stuck paying the tax.
Equipment purchases and sales
There are advantages of buying equipment ownership. Such as, you gain ownership of it. This is especially true when the property has a long useful life and is not likely to become technologically outdated in the near future, like office furniture. There are some tax incentives, Section 179 of the Internal Revenue Code allows you to fully deduct the cost of some newly purchased assets in the first year, you can deduct up to $500,000 of equipment (subject to a phase-out if you placed more than $2,000,000 of equipment in service in any one year). Also, possibility of depreciation deduction. Sales of equipment create a gain or loss to income after disposal of the asset. Gains on a sale are created when the asset is sold for an amount more than the book value and vice versa for a Loss. The gain or loss is realized as other income on the tax return.
Financial and estate planning
Long-term financial security is a common goal for many. We can guide you through planning decisions to help you minimize transfer taxes while maximizing equitable asset distributions to your heirs. Creating your estate plan is the best way to protect and preserve your legacy. There are some elements to estate planning that we can help you design. A will lets you specify your wishes, including how you want your property distributed, who will administer your estate and who will care for your minor children. A trust holds your assets for the benefit of one or more people (you, your spouse, your children). Life insurance proceeds are paid to a beneficiary at your death. Gifts are transfers of property made during your life to family, friends or charity. Tax exclusions are available as important estate planning tools.
Insurance review with your agent
It is important to review an insurance policy on a periodic basis. All too often we set insurance policies aside in a file drawer and forget that some items in them need to be updated from time-to-time. We can review your insurance policies to make sure that the policy reflects the life and situation you have now.
Inventory control systems
An inventory control system is a system the encompasses all aspects of managing a company’s inventories; purchasing, shipping, receiving, tracking, warehousing and storage, turnover, and reordering. In today’s business environment, even small and mid-sized businesses have come to rely on computerized inventory management systems. Business experts commonly cite inventory management as a vital element that can spell the difference between success and failure in today’s keenly competitive business world.
Should you lease or buy? this is the question and we will help you make the decision. All types of equipment leasing-from motor vehicles to computers, from manufacturing machinery to office furniture-have become more and more attractive.
- Lease vs buy equipment – A lease is a long term agreement to rent equipment, land, buildings, or any other asset. In return for most-but not all-of the benefits of ownership, the user (lessee) makes periodic payments to the owner of the asset (lessor). The lease payment covers the original cost of the equipment or other asset and provides the lessor a profit.
Office systems and controls
An office has its own system to do office work. The reason is that volume of work of an office differ from another. System means a preplanned approach to do the day to day work to achieve the desired objectives of an organization. It is important to implement a system for the office or workplace. Some advantages of having a good system are: improved operating efficiency, maintains uniform procedure, optimum utilization of resources, and reduce office expenses.
Planning for education expenses
To pay for a child’s education, parents and families can use a variety of different funding sources. A qualified tuition program is a program set up to allow you to either prepay, or contribute to an account established for paying, a student’s qualified education expenses at an eligible educational institution.
Projections, budgets, goals
Do you have financial goals? We can help you implement strategies to get to where you want to be. It’s important to estimate the future financial performance of your business with projections. Also, budgeting is a big component of financial success. It’s not difficult to implement, and it’s not just for people with limited funds.
Real estate sales and acquisitions
There are some tax implications to consider when selling or acquiring real estate. Federal tax law allows home sellers a tax exclusion on the capital gains from the sale as long as they meet certain criteria, the most important of which is that the home must be the primary residence for at least two of the previous five years. Single taxpayers can exclude a profit of up to $250,000, and married taxpayers who file joint returns can exclude a profit of up to $500,000. You can use this exclusion more than once in your lifetime as long as you haven’t taken the exclusion within the past two years for another house. When acquiring real estate, there are some tax deductions allowed, such as mortgage interest.
This is the process of determining retirement income goals and the decisions necessary to achieve those goals. Retirement planning includes identifying sources of income, estimating expenses, implementing a savings program and managing assets. There are several options to reach these goals that we can discuss with you and help you decide what works best for your retirement plans.