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A budget represents the numerical battle lines in which a business fights to succeed in the coming year. To this end, it’s advantageous to do an early review of the budget now, while there’s still plenty of time to make sensible adjustments. The key is to keep the budget in mind as the year progresses and rework it as new information becomes available. This article explains how to do so and looks at the three primary components of a budget: the income statement, cash flow statement and balance sheet. A sidebar notes the importance of making sure the budget doesn’t ignore impending tax liability.
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Sometimes a company may evolve to the point where different segments don’t work well together or multiple owners find themselves unable to agree on a strategic direction. Dividing the business into separate entities may provide a way to conquer such dilemmas. But doing so may create some problems as well. This article explains how to design splits as tax-free transactions and shows how splitting the business may also affect one’s personal finances. It’s also important to check whether the split passes muster with any buy-sell agreement or trustees of an Employee Stock Ownership Plan.
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Those who are caring for an aging parent and children — or just a parent, for that matter — may find it possible to earn a tax break to ease the stress and financial burden of the situation: the adult-dependent exemption. This article explains the basic qualification requirements, along with factors that can affect qualification.
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With tax rates scheduled to go up in 2013, now is a good time to consider converting a traditional IRA to a Roth IRA. This article explains why by pointing out the differences between the two types of IRAs and showing the tax and estate planning advantages of the Roth version.
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