2015 CAPTIVE COUNT-DOWN
There are 12 Days remaining to start the process to form a captive and pay tax-deductible premiums in 2015!
Life is full of costs, and it seems like they are always going up. If you’re like me, you probably don’t like to think about costs. Sometimes, it’s easy to think, “I’ll worry about that later,” or “I’ll pay that later.” But, it’s early November, and there is a substantial cost that is urgent and looming. Successful business owners and their advisors have only a few weeks to address this very important cost: The Cost Of Waiting To Set-Up Their Own Captive Insurance Company (CIC) – (CLICK HERE to read What Is A CIC). This cost is usually in the hundreds of thousands of dollars and can total as much as $600,000 in lost tax savings.
This year, we have written about the many benefits of owning one or more captive insurance companies. Businesses with a captive insurance company are better positioned for long term survival (CLICK HERE to read more). Businesses that own a captive insurance company benefit from a vastly improved risk management posture. And, a captive insurance company forms the backbone or chassis for small / mid-size business Enterprise Risk Management (ERM). Captives also facilitate significant wealth accumulation by business owners (CLICK HERE to read more).
Why Is It Important Now?
It takes 6 weeks to form a captive insurance company. Businesses with a calendar year fiscal ending on 12-31 still have time to form a CIC and pay tax deductible premiums to their CIC in 2015. The deadline to start the process is November 15!
What Is The Cost Of Waiting?
The cost of waiting to form a CIC in 2015 is hundreds of thousands of dollars. Assuming a combined federal and state income tax rate of 50%, the cost of waiting can be as high as $600,000. A small captive insurance company can make an 831(b) tax election. Its underwriting profits are taxed at a rate of 0% (zero percent). To qualify as a small insurance company, the CIC must receive premiums of less than $1.2 million. Taxes paid to the IRS are gone forever, leaving businesses and their owners poorer, weaker and less prepared for risk and uncertainty.
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, Attorneys and Information Technology Professionals. We specialize in Corporation and LLC 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. For more information visit our website www.myprofessionalcfo.com 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. Call us at: 1 (800) 517-0CFO 1 or (800) 517-0236 Captive services powered by: