Category Archives: Finance

Accountant calculating taxes

A Guide on Business Taxes by Corporation Types

Accountant calculating taxesFor some time now, Utah has been regarded as one of the best states for business in the US. It’s primarily because its economy grows at a rate of 2.3% annually compared to the 0.5% of other states. It also boasts one of the most competitive tax advantages for different types of business structures, particularly corporations.

Utah’s flat corporate tax is 5%, one of the lowest countrywide. There are different guidelines CPA firms in Utah follow when filing corporate taxes for various forms of corporations. Here is a guide on the different types of corporations and their respective tax schemes.

C Corporation

This refers to any corporation which is separately taxed from its owners under the US federal income tax law. All profits and earnings are treated as dividends for purposes of income tax. Exchanges of shareholder stocks, however, are not treated as dividends. A C corporation is ideal when some owners actively manage the business while others are only indirectly involved.

General Corporation

This is treated as a separate tax entity from its shareholders. Unlike a C corporation that’s limited to 30-50 shareholders, a general corporation may have unlimited shareholders. Though expensive to form and heavily regulated, a general corporation has tax free benefits like retirement plans, insurance, and travel deductions. The Utah-based accounting firm, Sorenson & Company, says experienced corporate CPAs should be able to maximize these deductions to provide tax relief for corporations.

S Corporation

This is a corporation which passes corporate deductions, losses, credit, and taxes to shareholders for purposes of federal taxes. Taxation in S corporations hence resembles a partnership arrangement as income is taxed at shareholder level rather than company level. To be considered an S corporation, a company must have at most 100 shareholders, have one class of stock, and be an eligible entity.

Different state laws govern the process of incorporation. Corporations are legally recognized and have rights and responsibilities akin to natural persons under Utah law. Consult a CPA firm before settling on your ideal corporation type from the above to ensure you select the best for your business taxes.

A house model of a house for sale

How Can I Reduce Capital Gains Tax When I Sell My Property?

A house model of a house for saleWhen selling your property, taxes are unfortunately inevitable. However, there are ways to help you save some of your money. One of the most common and popular is the capital gains tax exemption.

But what if you don’t qualify for this exemption just yet? Experts at 1031 Exchange Place share some strategies you could use to reduce your capital gains tax:

Wait for five years at least after you have purchased your home to sell it

To qualify for the capital gains tax exemptions, you have to live in the house for two of the five years before selling it. Let’s say that you need to move somewhere else after living in your house for 2 ½ years; you could rent out your house for another 2 ½ years to satisfy the 5-year requirement.

Consider a 1031 Exchange if you’re selling an investment or rental property

Under the Section 1031 of the IRS tax code, you could exchange like-kind properties, also called 1031 exchange properties, so you won’t have to pay taxes on your initial profit. Like-kind properties need to be similar, such that you could exchange an office space for another office space. If one property is worth more than the other property, you could even the deal with cash.

Monitor your selling and home improvements expenses

You would need clear records and actual receipts when filing your taxes, so keep track of all you spend on property upgrades and improvements, so you claim these deductions at tax time.

Sell only after experiencing capital losses

If you are currently generating less income than normal, you could take advantage of your situation by selling your property. Essentially, since income is the main determinant of your tax rate, a lower income would mean lower taxes when you sell your property.

While fulfilling, owning property also comes with headaches, mainly maintenance and the taxes when it comes to selling it. By understanding how capital gains tax work, you could plan your sale to maximize profit even if it’s not initially exempt from capital gains tax.

Five Investments that Can Stabilize Your Monthly Expenses

piggy bank, calculator, and coinsMost people get anxious every month because of the bills that have to be settled. The uncertainty can result in a person having to take out some funds allotted to essential matters. For those who want to have a stable fund for their monthly expenses, these five investments will do a lot in keeping it at a certain level.

House and Lot

When someone purchases a house and lot through a mortgage, a person will have a fixed amount of payment every month. In comparison, rental fees are expected to climb in the next few years. This alone is enough reason to find a new home in Olathe. It can be costly, but it will stabilize your monthly expenses.

Health Insurance

When someone lives from paycheck to paycheck, he or she can’t afford to be hospitalized. To minimize the impact, the combination of Social Security and health insurance will help with the expenses if that happens.

Savings Accounts

Savings accounts are tickets to surviving a financial emergency. Your money will increase over a period because of the interest.

Solar Panels

Substantial increases in utilities will affect the overall monthly expenses. A solar panel will help in minimizing significant fluctuations in cost.

Refrigerators

The cost of eating out and buying groceries occupies a big part in a person’s monthly expenses. It would be smart to have a refrigerator so that the household can purchase perishables in bulk, resulting in savings. Just as long as people cook, there will be much savings.

Investments do not just improve the financial capability of a person. They also ensure that a person will be ready should difficulties happen in the future.

How to Reduce Your Hospital Bills

Budgeting for Hospital CostsHealthcare is getting expensive everywhere. Since many people are failing to pay, some hospitals have even introduced a new system where you have to pay before receiving medical care.

A visit to a hospital might cost you hundreds of dollars, if not thousands. When you are unwell, you can’t avoid going to the hospital, but you can trim your healthcare costs. These tips might help you reduce your medical bills.

Insurance Cover

You’ll pay lower prices for healthcare if you have medical insurance. For retirees and disabled people, find good social security disability specialists to help you benefit from federal insurance programs. While taking insurance cover, it is crucial to ask about the types of illnesses they cover and the length of hospital stays they can pay for.

Ask for Financial Assistance

Some hospitals provide financial support. Just walk to the billing department and let them know of your situation. There is usually a phone number on the bill. Use it to call them to find out if you qualify for their patient financial assistance programs.

Pay in Cash

You can get a discount if you pay your bill upfront in cash. Hospitals and other medical facilities usually provide about 5-10% in rebates if you pay in cash. This mode of payment also allows you to negotiate your bills. Ask if there are discounts that you will qualify for should you pay your bills in cash.

There are many options to consider when it comes to reducing your hospital bills. In most cases, all you have to do is ask.

Home Loan Mortgage

Boosting Your Dedication to Purchase Your Dream House

Home Loan MortgageYou have now set your sights on looking for your dream home. As this is another milestone in your life, you need to be fully prepared for it. Here are just a few suggestions to make purchasing your future home a fulfilling experience instead of a hassle-filled nightmare.

Pay Off Your Debts

Unless you plan to pay your home in cash, you’ll need to improve your credit score to get a better chance of being approved. Check for any outstanding debt, which can be cleared immediately. Reduce the use of your credit card when making purchases. All in all, try not to apply for any other loan until you’ve been approved for your mortgage.

Choose Your Mortgage Wisely

Your chance of being approved for a home loan is also dependent on what kind of credit package you choose. Find the right professional and licensed realty company and ask for expert advice on what kind of payment scheme will give you a better approval rate. Whether it’s a standard mortgage package or an FHA 203k loan, Primary Residential Mortgage, Inc. reminds that knowing what will fit your financial capacities would make your application a lot easier.

Reduce Your Expenditures

Simplify your lifestyle even before you start paying mortgages, realty taxes, and property maintenance. Minimize spending on leisure and entertainment. Consider cooking healthier meals and bringing them to work. Look for options to reduce your utilities and fuel cost.

Build Up Your Savings

This factor can add to your chances of approval, so start saving up as soon as you’ve decided to buy a house. If you still don’t have a private bank account, apply for one immediately. Whatever you’ve saved in cutting down on costs, you should automatically put it in your savings account. Set goals on how much you want to save within a year and stick to it.

It’s possible to see your dreams come true if you are truly committed to it. Just remain steadfast in your plans and be disciplined at all times. Your prize will be that new house that you can truly be proud of.

Woman handing the pen to sign loan document

Asset-Based Lending: Is It Right for Your Business?

Woman handing the pen to sign loan documentIf your cash flow problems can’t wait until your customers pay, you can use an asset-based lending product, to boost your company’s liquidity immediately. In this loan, you can use your receivables as collateral, and get a cash advance equivalent to up to 90% of your chosen unpaid invoice or batch of invoices.

Asset-based financing options from TAB Bank give you the luxury to forget about repayment schedules and get most of the money owed to you before your debtors pay up. However, it’s not all roses. It has restrictions and can be prone to misuse.

To know whether you should take a loan secured by your outstanding invoices, or other assets, answer these important questions:

How Much Is the Amount of Your Receivables?

Asset-Based financial products have a borrowing base of $700,000, which could go as high as a few million. This is why financing facilities, like banks, only offer them to more established companies. If the value of your receivables doesn’t meet the minimum requirement, consider invoice factoring instead, which involves selling your invoices to a third party.

What Do You Need to Funds for?

Financial experts would tell you that it only makes sense to apply for an asset-based loan to get on-demand funds. It’s a handy solution when your company suddenly becomes cash-strapped on particular occasions. But if you need an ongoing source of funds, just like a line of credit, invoice factoring might be the better choice.

Can You Handle the Costs?

Compared to factoring facilities, asset-based financing providers charge far less. But then again, you might wind up paying for more if you finance single invoices occasionally. The lack of a long-term contract would make the setup and maintenance costs to add up and lighten your coffers ultimately.

While the fundamentals are the same, the features of asset-based loans might vary from lender to lender. Understand how the product works to use it to good effect and spend the least amount of money.

4 Ways to Have Better Credit Score

Credit ReportThe credit score is one of the most important factors you have for you to be able to access financial assistance from banking institutions. If you have a good credit score, you are more likely to be able to have your credit card or personal loans approved.

A bad credit score is not the most helpful thing to have when you have financial difficulty. The following are ways you can do to improve your credit score.

Get a mortgage

It may seem like getting a mortgage is the antithesis of boosting your credit score. But it actually is quite helpful especially when you have a history of paying your monthly dues on time. Apart from that, it also has tax benefits, reins in the financial impact of asset depreciation and lessens the risks.

Get a Utah mortgage from firms such as Altius Mortgage Group to get these advantages.

Eliminate credit card balance

One of the things considered in determining the score is the balance of your credit cards. If you have money to pay these balances off, settle them right away to have better chances of having an improved credit score.

Put old debt on report

If you were able to pay off your old debt on time, it would be positive for you to put that on your credit report. This will improve your chances to get a loan approved.

Pay your bills on time

Always pay your bills on time. This is to ensure that the credit score is not too low and so that your credit history is flawless.

Whether you are going to apply for a loan to help you with financial difficulty or you are trying to make a big purchase, a good credit score will do a lot in giving you financial security. This should be enough reason for you to make it an endeavor to have a better credit score.

Is it Hard to Secure a Construction Loan?

Money, calculator and contract focused with house blurred backgroundIf you value customization over convenience, building your home from the ground up is better than buying an already existing one. New home construction projects are actually not uncommon in the North Star State. Despite the additional costs, many homeowners choose to build instead of buying to bring the home up to code successfully. Like a blank canvas, a vacant piece of land offers countless design possibilities.

The only challenge to those who tackle new home construction in Lakeville, MN, and nearby areas are obtaining a favorable mortgage to fund your project. Here’s why it can be hard to secure a construction loan:

Stakes Are Extraordinarily High

Most lenders are reluctant to loan a considerable sum of money for a property that doesn’t exist yet. The construction process is full of uncertainty, making it an extremely risky endeavor. If things don’t go as planned, the lender might find it difficult to recoup the money even if the piece of real estate is used as a collateral. In the end, absorbing significant financial losses is highly probable.

Strong Lender Relationship Is Important

Considering most lenders don’t aggressively market high-risk construction loans, the ones that are likely to provide you with the funding are those that are already known to you. Talk to financial institutions, such as banks and credit unions, which you’ve already established relationships with. Not only they increase your chances of approval, they are likely to offer lower interest rates as well.

Large Down Payment Is Necessary

Even if you manage you find a willing lender, don’t expect the mortgage to finance the entirety of your project. To reduce the risk of your new home construction project, the lender may only offer to cover 80% of the expenses — or even less. Be ready to put down at least 20% of the project’s overall cost to get it off the ground.

Don’t let the scarcity of construction loan providers discourage you from realizing your goal of building your dream home from scratch. Take your time to explore the available financial products and study your options to identify the most favorable ones.

How Business Owners Can Save on Overhead Costs

A money box and electronic calculatorAs a business owner, you should always find ways to reduce your overhead costs without sacrificing the quality and value of your services or products. There are ways to reduce your operating expenses while maintaining every aspect of your company that keeps customers happy.

Consider a Modern Workspace

If you operate a smaller business, consider the benefits of a modern workspace. A virtual workspace allows you numerous modern benefits, including a reputable address and phone number, and even a secretary who will answer customer calls for you.

Contact a company that offers virtual office franchise services in your area for assistance, such as Venture X.

Sublet Your Extra Space

If you have extra office space that goes unused, it is a waste of resources. Unfortunately, many new startup companies find themselves locked into 3 or even 5-year lease terms, making it impossible to move on and find a space that is better suited to their needs.

Fortunately, you can reduce overhead costs and wasted space by subletting the unused office space.

Switch to Electronic Paperwork

It costs money to store paper files. Paperwork takes up space in your office, and you lose time and money when you have to dig through stacks of paper to find what you need. Rather than investing in a space with a storage space or digging through files, switch to electronic paperwork.

Aside from reducing overhead costs, you will also save at least a few trees.

Control Purchases You Make

Another way to reduce overhead costs is to reduce the purchases you make. Evaluate every purchase made to determine if it is necessary. If you find that it is something you can go without, skip it. Also, look into alternatives to what you want to buy to see if there is a cheaper option.

Controlling your purchases can save you money and reduce overhead costs greatly.

You will find that once you reduce your overhead costs, your profitability will increase. You need to improve your profitability to succeed as a business owner in this day and age.

Buying a Boat on Black Friday Offers More Than Just Discounts

mature man driving speedboatBlack Friday may be over and for those who decided to buy a boat, the advantages of doing so on this day involve more than just discounts.

Aside from saving money, shopping for a new boat in late November often allows you to choose from different models. That is because most retailers seek to clear their summer inventories before stocking on the following year’s new models.

Inventory sale

Since most sellers aim to clear their inventories to make room for new boats, this will prompt them to offer attractive prices that you otherwise were unable to afford during the boating season in the middle of the year.

Even if you live in states such as California where there are no off-peak times, you may still find several dealerships that want to get their hands off old models. In states with cold weather, a purchase during the holiday season provides you with more time to customize your boat before using it in spring. Take note that you should not use basic household products such as bleach to maintain your boat, which seems to be a common practice.

First dibs

If you have some money to spare, you may also be able to afford new models that are due to be launched in the following year. The winter season often marks the start of boat shows nationwide. Boat manufacturers aim to take advantage of holiday spending by offering discounted top-of-the-line boats.

Boat shops also sell various accessories, including a custom boat cover at an affordable cost. The cost for these ancillary products also goes down during Black Friday. If you dislike shopping along with many people, you can take relief that not many Americans go to boat shops on this day.

With all the advantages of buying a boat during Black Friday, do you think there are other days that are better to make a purchase?