Newport Beach CPA Accountant

5 Reasons Your Business Needs An Exit Strategy

Exit Strategy3If you are like most entrepreneurs, the last thing you are thinking about is how to exit your business. You are more concerned about growth, expansion and sometimes just making ends meet. Well, the truth is, all successful business people have a clear exit strategy as part of their overall business plan. Just what is an exit strategy? An exit strategy is a plan on how you and your partners will leave the business. This leaving can be the sale of the business, an IPO, or transferring ownership to your heirs. Whatever your exit plan, building the business with this final goal in mind, will make things much easier when the time finally comes. If you are still not convinced of the necessity of an exit strategy, here are 7 reasons your business needs one.

1. Allows for retirement

An exit strategy allows for the business owner to retire comfortably. If you’re like most owners, most of your net worth is tied up in your business. Having a clear cut exit strategy will enable you to turn this net worth into cash permitting a comfortable and worry free retirement.

2. Provides for the future

If you are operating a successful business, its important that the business can carry on without you. Your employees and family depend on the business thus having an exit strategy planned can allow your business to continue to provide for your family and loyal employees.

3. Cashing out to invest

Even if you are not ready to retire, many entrepreneurs have the goal of starting other businesses or becoming a venture capitalist to help other business people with good ideas but limited funds. An exit strategy can provide the liquidity you need to obtain these goals.

4. Be appealing to investors

If you are seeking outside investment for your business, having a clear exit strategy is a must. Investors want to know how they are going to make money. An exit strategy will put this in black and white so that potential investors can see how you plan to earn them a return.

5. When to quit

Finally, an exit strategy creates a time frame for when to throw in the towel. It’s important not to keep throwing good money after bad in business ventures that simply are not working. Going into the business with an exit strategy will provide guidelines on how to end the business, regardless of its success.

Tax Benefits of Health Savings Accounts

While most people are familiar with tax benefits other types of investments, often times, they are less familiar when it comes to the tax benefits of health savings accounts. There are three such benefits that you should know about and take advantage of.

Health Savings AccountPerhaps the largest tax benefit is that the money that goes into the account is tax-deductible. Also, if the money is invested through a company payroll deduction, all contributions are made pre-tax.

The second tax benefit comes on the interest side. Health savings accounts, do earn interest, and this interest is tax free. This allows an individual to use the account for long-term appreciation as the money does grows tax free. In that regard, it is very much like a Roth IRA with the added benefit of a current tax deduction.

The third tax benefit is that the owner of the account has the option of taking tax free withdrawals for medical expenses. These expenses must quality, but they do include almost all services provided by licensed health providers as well as substance abuse treatment and prescriptions.

Currently, in 2015, an individual can contribute up to $3,350 and a family can contribute up to $6,650. For those over the age of 55, an extra $1,000 contribution per year is allowed.

Finally, it is important to note that health savings accounts do not have a limit on carry-overs or a requirement on when the funds must be used. This is what enables them to be used for long-term savings to offset increased health-care costs or additional costs after retirement.

While health savings accounts haven’t always been on the forefront of investment options, with health insurance policy’s current rising deductibles and out-of-pocket expenses, more individuals are qualifying for the accounts, and with the tax benefits, it’s wise to give them a look.

If you are tired of overpaying taxes, then give us a call at 949-759-5626 and ask for Jerry Morey.

Morey & Associates is an Orange County CPA Firm with offices in Newport Beach and San Clemente.  We are a full service CPA Firm working small businesses and high net worth individuals.  For additional expertise, Morey & Associates has developed additional expertise in real estate accounting to help property management companies, real estate investment trusts, and commercial investor groups.

What to Do if Your Tax Refund Check is Stolen or Lost

Tax Refund CheckWhether your tax refund check was lost or stolen, swift action is the best course of action to handle the situation. The longer you wait, the more difficult it becomes for the IRS to track the check and get your money to you. These are the steps you need to take.

Lost Refund Checks

Lost checks are, indeed, frustrating, but it does happen. The first step you need to take is to contact the IRS by calling 800-829-1954. If your return was married filing jointly, however, you must choose to speak with an agent rather than going through the automated system to make the claim.

At this point, the IRS will issue a Taxpayer Statement Regarding Refund form (Form 3911), which will begin the replacement process.

Once the missing refund has been processed and the check cashed, you will receive a claim package including a copy of the check from the Bureau of Fiscal Services. The IRS will examine both the signature on the check and the claim before deciding whether to process an additional refund. The review process may take up to six weeks.

Stolen Refund Checks

Before you panic believing the check has been stolen in the mail, you should call 800-829-4477 to verify that your refund has, in fact, been issued and mailed to you. You will need to know your social security number and the exact amount of the expected refund.

If your check has been stolen, call the number above, and provide the information required. You must typically wait 28 days from the date the check was mailed in order to file a claim, once you do, the process can begin Uncle Sam can begin the process of re-issuing your refund.

If you have questions or concerns about your options if your tax refund check has been lost or stolen, your accountant is available to walk you through the actions you should take next.