Archive for the ‘Tax Specialist’ Category

byAlma Abell

An employer-sponsored 401(k) account is one of the most effective ways to save for retirement. These accounts offer tax advantages and the convenience of adding money to the account before it even lands in the employee’s wallet. This type of plan is perfect for people who would find another way to spend the money if they got it in their hands. It offers an artificial discipline and helps build retirement savings. Some companies even match a small percentage of the amount the employee contributes. Most of these benefits are lost though, as soon as an employee terminates their relationship with the company.

[youtube]http://www.youtube.com/watch?v=DXwCBsDirMI[/youtube]

An employee today may work for several different companies in their lifetime. In the transition, it’s easy to forget things like modest retirement savings accounts. However, by setting up a Rollover in Colusa instead of letting the account sit without any attention, investors can continue to build wealth and compound the money they saved as well as any employer contributions they may have earned during their tenure with the company.

A 401(k) could be rolled over into another 401(k) or into an IRA. The other, and less desirable option, is to convert the account to cash. Taking the cash might seem like a good idea when a person just left their job and has limited funds in their bank account. However, there are a couple of reasons why a Rollover in Colusa is a better choice. The first reason affects the former employee in the short term. Cashing in a 401(k) account results in a severe tax penalty. The cash value of the retirement account for someone who hasn’t reached retirement age is significantly less than it would be if it was rolled into a new account.

The other reason it’s better to do a rollover instead of taking the cash is that the value will continue to grow in a new account. Anyone who has recently left their job or plans to soon can Call us to learn more about their rollover options. Rolling over the account right away is the best way to avoid unnecessary losses due to lack of regular contributions to the retirement savings account.

byadmin

Finance is the basic requirement for starting or expanding any small business. Those who do not have big savings to start it on their own need somebody to help achieve their aspirations. Small entrepreneurs have plenty of sources to get funds for starting their business.

Debt and equity financing are two financial strategies that can help you get going. Incurring debt entails you to borrow money for the business. By gaining equity you can put stakeholder’s cash in to your business or pump in your own money.

Debt financing:

Many small business owners have the misconception that borrowing from financial institutions depletes their cash profits. In reality it is a good option if you have sound cash flows to repay loan with interest amount.

Advantages:

1 The ownership of the business remains with you. You continue to enjoy sole right on profits generated by your business. You also remain the sole controller of your business and the lender has no right to interfere.

2 You can retain entire profits with the company or use it for repayment of the loan.

3 You get entitled to tax exemptions on the amount of interest paid to the lender.

Disadvantages:

1 You are required to maintain sufficient cash flow to repay loan, or part with cash profits to pay back.

2 The lender may charge higher interest if it treats your application for loan as high risk value.

3 Lender gets rights to seize your collateral, in case of non repayment.

4 Large and frequent debts can lower your credit rating and hamper future prospects of raising money.

Equity Financing:

Equity financing is the preferred option for most of the small business owners who find it difficult to qualify for loan and refrain parting with cash profits to repay loan. Equity financing can be availed either from partners in the business or the investors. Just like debt financing, equity financing also has its own set of advantages and disadvantages

Advantages:

1 Equity contributions are not required to be paid back even in the situation of bankruptcy.

2 You do not have to pledge business assets as collateral to avail equity investments.

3 Sufficient equity enhances credibility with lenders and investors.

4 More cash is available for use since no debt payments have to be made.

Disadvantages:

1 You are required to share profits with equity investors and surrender some of your ownership stakes.

2 The investor will have a say in running of the business.

3 Dividend payments are not tax exempted.