Monthly Archives:' December 2015

Independent Contractor Physician Corp. Case Study: Avoid Tax Lien, Invest, Judgment Proof Assets

You have graduated medical school, and have completed your internship and residency. You are now ready to reap the financial rewards of all your hard work. What no one has told you along the way is that the decisions you make right now will dictate where you are financially in the next 25 years. Make the right decisions by hiring a business manager and setting up a physician pension, and you can find yourself reducing your number of monthly shifts, and increasing your leisure activities. Make the wrong decisions, and you could find yourself living paycheck to paycheck, servicing a mounting debt load and paying off a tax lien. Not to scare you, but this is a true story of a close family member who made the wrong decisions when he finished his residency.

Avoid Tax Liens

Tax liens are something you never want to deal with, and they are the result of a physician either not properly paying quarterly estimated tax payments, or, simply spending everything as the checks come in. Underpaying your taxes will ALWAYS wind up costing you in penalties. As a physician, the IRS knows you make a significant amount of money, and they do not want to wait. Establish a Physician Corporation and start yourself out by paying the business expenses allowed, and make file your payroll tax payments and returns on time. The physician business expenses will reduce some of your income and the regular salary will keep you from overspending.

Do not attempt to put money in a savings account in hopes that it will be sufficient come tax time. It is seldom enough, and as was the case with my family member, the account became a convenient source of extra funds for his soon to be ex-wife. A business manager could have taken the financial strain off of this relationship.

Physician Investments

Payroll deductions are allowed to include funding your retirement accounts. After all, you don ́t want to work shifts forever. You as an officer of your corporation are allowed to have a pre-tax salary deferral to your 401(k) plan and an after tax contribution to your Roth 401(k) plan. What most don ́t know exists is the Physician Pension Plan. Yes, you can establish a pension for yourself that is an expense to the business, essentially reducing your taxable income, and maximizing your annual savings. Your business manager can help you establish the correct type of plan, and the appropriate funding level to meet your needs.

Judgment Proof Your Assets

Aside from taxes, most of our physician clients ask questions about strategies to protect their assets from judgment. There are countless companies who will gladly take your money and set up a captive insurance company, or create an elaborate offshore trust system to shield your assets from judgment. I have even known physicians to place all of their assets in the name of their spouse. All things considered, the least expensive and most effective method for a physician to protect their assets is to extensively fund their retirement. Physician retirement plans are not subject to civil judgment or garnishment in virtually all states. Physician retirement plans are also exempt from bankruptcy. Ask your business manger for more details. As a new physician, reading the above sections has hopefully given you a list of things to do now to prevent what could be years of paying off debts and living paycheck to paycheck. By the way, the close family member who this case study is based on just paid off his tax lien, and is now on his way to saving for his retirement. He has been an ER Physician for 8 years. Hiring a physician business manager today will save you more in annual taxes than you pay for their services. Don ́t try to go at it alone in order to save some money today. It just may cost you in the long run.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)

For a Limited Time, get FREE Incorporation with our Accounting/Payroll Services! Click here to submit your e-mail for more information.

Avoid Mistakes Small Businesses Make: Corporation, LLC Accounting and Payroll

Congratulations! You have either just recently started your small business, or you are in the final stages of convincing yourself that it is time to take the plunge. Whether you have done this to take control of your future, or you were an independent contractor who decided that there were additional tax savings to be had, the most important this is that you have done it.

Now, the key is to not make the key mistake of not properly filing the proper tax returns, and to make the necessary tax payments. After all, this is the reason you hear advertisements on the TV and radio asking if you owe more than $100,000 to either the IRS or the state. Do NOT let this happen to you. Read on to learn more about managing your small business accounting and why you may want to hire a Business Manager.

Regularly Scheduled Payroll

If you are the only employee in your small business, how and when you pay yourself is really up to you; however, if you have employees, they will expect to be paid on a regularly scheduled basis. What goes along with paying employees is the handling of their appropriate deductions and withholding amounts, as well as the appropriate employer matches to Social Security and Medicare taxes. Failure to appropriately handle these funds has caused long lasting tax problems for small and large business owners.

Payroll Tax Payment and Reporting

Regardless of how often you pay yourself and/or your employees, the state and federal government demand that reports get filed, along with the appropriate tax payments on a strict schedule. Failure to file these reports and make timely payments can result in severe penalties, which unfortunately revert back to the owner of the business. Learn early on what these amounts are, and when these reports are due, and you will be thankful you did.

Small Business Accounting

Odds are that unless you are an accountant, you did not start your business to spend all of your time bookkeeping. While your primary focus is that of either developing your products and/or services, or marketing them, failure to spend the requisite amount of time taking care of the business accounting and bookkeeping can negate the potential tax savings that can come your way, simply because you own a small business.

Small Business Software

Today, small business software is everywhere. I have even seen companies giving it away on the internet. There are a number of “off the shelf” Accounting programs on the market today, but quite frankly, many small business owners are finding them too complex to fully utilize without a significant amount of accounting knowledge to start with. If you have the accounting knowledge, or are willing to put in the necessary amount of time to acquire it, the packages are fully capable of doing everything you need them to do. The question to ask yourself is “How much time do I really want to spend on this?” and “What is this amount of time costing me in lost sales?”

Costs and Efficiency

It doesn ́t matter if you are an Independent Contractor Physician, or a Salesman who has decided to break away from “Corporate America” and go it alone, every small business owner knows that you get to keep more money if you can figure out how to do more with less expense. Maximizing your efficiency is something a Business Manager would be able to help you with. You get to spend your time doing what makes you and your business manager is solely focused on doing the things that you don ́t make you money, i.e., payroll, tax reporting and accounts payable, among other things.

Don’t let yourself get caught in the tax trap of missing filing deadlines, and not making payroll tax payments at the appropriate time. Take the steps necessary early when you are still building your business, rather than having to deal with tax liens and legal bills when your business is successful.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1-800-517-0CFO (1-800-517-0236)

For a Limited Time, get FREE Incorporation with our Accounting/Payroll Services! Submit your e-mail for more information, or schedule a quick phone call with me here.

Why Your LLC, Corp, PA, PC May Not Be Valid

You probably formed your company, whether it is a LLC / Corp / PA or PC, for a variety of reasons. Some of these reasons may include protecting your personal assets, defining ownership if you have partners, or simply so you had a separate set of accounting records in the event you have employees or various retirement plans. How would you feel if someone were to tell you that this did not do the job you wanted, only because your entity was either not set up correctly in the first place, or that you have failed to properly maintain your entity? As an LLC / Corp / PA or PC, you have ongoing obligations that must be met in order to maintain your “corporate veil” of protection. Failure to do so will allow an attorney to “pierce the corporate veil” which can open you up to personal liability, and make your personal assets fair game to civil judgment. Read on to protect yourself from making this mistake.

Bylaws

The bylaws contain the most fundamental principles and rules regarding the nature of the corporation, and are generally the governing document. In simplistic terms, corporate bylaws define the Name, Objective, Members, Officers, Meetings, Executive board, Committees, and ability to make Amendments. Your corporation does not formally exist until bylaws have been adopted, unless otherwise provided by law.

Operating Agreements

LLC ́s are very flexible in nature and the operating agreement defines each member or manager’s rights, powers and entitlements. This includes capital accounts, membership interest, distributions of profit and allocated tax responsibility, just to name a few. This is an agreement agree to by the company members that contains provisions for critical items and rules that run the company. Operating agreements can be amended at anytime by the company members or managers; however, one is necessary to prove that any given member is indeed separate from the entity itself. Similar to corporate bylaws, the LLC does not formally exist until an operating agreement has been adopted by the members.

Fictitious Name Filing

This filing states that an entity other than a person will be doing business in a given county. While this may seem mundane, this is a requirement, and must be filed in a specific newspaper in the county in which you will be doing business. In addition, a similar filing must be made when you choose to close your business. Failure to file for a fictitious name can result in local fines and restrictions from obtaining necessary permits and licenses.

Board Meetings

If you want the protection provided by being a corporation, you actually have to act like a corporation. This means that you must vote on a board of directors, and actually document that you had meetings, what was discussed, and what you decided to act on. This is one of the first items an attorney will ask for when trying to piece the “corporate veil”. Make certain you do this on a regular basis, or get some assistance to make sure your board meeting minutes are produced, and kept in your corporate compliance book.

Annual Reports

Your corporate annual report is due the beginning of each year, and the due date varies from state to state. This form requires you to provide information on corporate officers and your registered agent. Failure to complete this form, and pay your annual renewal fee on a timely basis will result in your company being “administratively dissolved”. If you have any corporate debts, and you are administratively dissolved, you just became personally liable for those obligations, as your company no longer exists.

You spent a lot of time and effort to get your business started and making money. We all understand that you can get caught up in the day to day operations of your business, and lose track of some of the things that are required, but, do not generate sales for your business. So before you let too much time pass, and your company no longer exists, give us a call. We will work with you to bring your filings up to date, and make certain they are current on a going forward basis.

My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs.

We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant. We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts.

We are not simply a document filing service; we are here to help you with the part of the business that you have to do, so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

Email us with any questions or call us at: 1 (800) 517-0CFO 1 (800) 517-0236

Why All Small Businesses Need A Business Manager: Time Management, Reduce Costs & Protect Assets

As a small business owner, regardless of the product or service you offer, your time is the most precious commodity you have. Since you only have a limited number of hours in each day, managing the amount of time you spend on various projects is critical. You want to make certain that these hours are as productive as possible, meaning they generate the greatest level of income possible. What you do not want to do is to spend hundreds of hours during the year on bookkeeping, taxes and keeping up with your corporate filings when you can have an expert take care of this for you.

If you are interested in learning how to leverage a business manager for improved small business time management, to reduce small business costs, and to protect your personal assets, read on.

Time Management

According to the Internal Revenue Service, you can anticipate spending over one hundred hours doing the recordkeeping for your company each year. In addition, you can expect to spend an additional 30 hours learning what forms you need to file, another 65 hours actually preparing the forms, and another 5 hours reviewing and actually filing your returns.

What is your time worth?

Since you are not able to increase the number of hours in each day, this is most likely not the best use of your time. A business manager is already knowledgeable about small business accounting, and will be able to do this amount of work in a fraction of the time, for a fraction of the cost. Don ́t make a costly management mistake. You are not a bookkeeper or accountant, so why should you try to become one. Let someone else do what you have to do, so you can spend your time on what you love to do.

Reduced Costs

Just like any other small business owner, you are looking to reduce costs anywhere you can. Before you start looking at hiring an internal bookkeeper and tax accountant, take a look at a business management company.

They can assist you in streamlining various portions of your business and will cost you much less than you would have ever thought. In addition, you will receive the expertise of a professional, for what it would cost you to have a part time bookkeeper. Remember, in the end, it really is about what you get to keep.

Your business manager is able to keep you informed about various filing deadlines, as well as giving you suggestions for managing and even reducing your various office expenses. Don ́t go it alone, have a partner who is looking to you as a client for the long term, not just a part time job until something better comes along.

Asset Protection

Do you remember the day you started your company? Not the day you opened for business, but the day you filed your corporation or LLC. You may have formed your corporation online, and went to the IRS website to get your EIN Number, but did you do everything you needed to do to actually BE a corporation? If you incorporate online, you use a document filing service that will fill out the forms you tell them, but they will not let you know what else you need to do.

For example, does your LLC have an operating agreement? If not, your LLC is not valid. Document filing services will not remind you that you have ongoing filing requirements. Not fulfilling these requirements means that you are can lose your status as a corporation, which can open you up to personal liability, and subject your personal assets to civil judgment along with filing penalties and interest. Your business manager or corporation service company can make sure all of your filings are complete and on time. They can also make suggestions that can reduce your tax liability.

You cannot be in control of a business if you don’t know what is going on. With bad numbers, or no numbers, a company is flying blind, and it happens all of the time. Why? For one thing, it is a common — and disastrous misconception that an outside accounting firm hired primarily to do the taxes will keep watch over the business. In reality, that is the job of the chief financial officer, one of the many hats an entrepreneur has to wear until a real one is hired. In the mean time there are professionals who specialize in working with businesses just like yours. They know what the requirements are, and can help you satisfy them all, while not costing you an arm and a leg. Small businesses are the engine that makes this country great, so spend your time and money wisely. Ask a professional for assistance with the aspects of your business that do not make you money, so you can focus on what does.


My Professional CFO, LLC, is a Business Management firm providing the highest level of service in three key areas of importance to Independent Contractor Physicians, Small Business Owners and Entrepreneurs. We specialize in Corporation filings and ongoing Compliance, Accounting and Payroll, and Investment Management. Our professionals will assist you in forming the appropriate type of company for your situation and work with you to make sure your company remains compliant.

We provide ongoing Accounting and Payroll services to make certain all bills are paid and necessary tax forms and withholding payments are made in a timely manner, as well as the set up and management of your retirement accounts. We are not simply a document filing service we are here to help you with the part of the business that you have to do so you can focus on what you love to do.

Alan Conner, MBA – President of My Professional CFO, LLC has nearly 2 decades of experience working with professionals and small business during both the start-up and ongoing management. He has written countless business plans and has managed assets for both institutions and high net worth clients.

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