Estimated Taxes for Business Owners

Estimated tax is the method used to pay tax on income that isn't subject lo withholding, most notably earnings from self-employment. Many owners of small businesses whether operated as S corporations, partnerships, limited liability companies electing partnership taxation, or sole proprietorships—pay their estimated lax using the same IRS Form 1040-ES that individuals use. Payments of estimated taxes are spread out over four payments, falling due in April. June, and September of the current year, and January of the following year. Generally a taxpayer must file estimated taxes if he or she owes S1.000 or more in taxes when an annual lax … [Read more...]

Ensure Your Financial Privacy

There is a federal law that affords consumers significant say over the pri­vacy of their financial information while still allowing financial institu­tions to share information for normal business purposes. This Act covers banks, savings and loan institutions, credit unions, insurance companies, securities firms, and even some retail­ers and automobile dealers that extend or make arrangements for consumer credit. There may be more forms of personal information gathered by the  institutions than you realize. They may have credit reports and records of how much you buy and borrow, where you shop, and how well or poorly you pay your bills … [Read more...]

Real Estate Deals Gone Wrong

The ageless advice to read, under­stand, and expect to be bound by lan­guage in a contract you sign is as sound now as ever. It is especially important with respect to contracts to buy real property, where the financial stakes are often high. Jerome contracted to buy property, delivering a 55,000 deposit to be credited toward the purchase price. An addendum to the contract agreed to by the parties staled thai in the event the seller breached the agree­ment or defaulted, Jerome was entitled to the return ofhis earnest money and cancellation of the contract, as his "sole and exclusive remedy." When the seller did not close on the deal … [Read more...]

Noncompetition Agreements and Arbitration

Although the Federal Arbitration Act is federal legislation, that is. the law of the land, the frequency with which it is part of standard employment contracts means that state courts, rather than federal courts, are more frequently called on to apply the Act to a contract dispute. Thirty years ago, the U.S. Supreme Court said that the Act declares "a national policy favoring arbitration." More recently, it has firmly come down against what it re­garded as a slate supreme court's "ju­dicial hostility" towards arbitration. The case arose out of litigation that ensued when two employees, whose contracts with their employer included … [Read more...]

Small Businesses and Job Discrimination

Number of Employees The federal Equal Employment Op­portunity Commission (EEOC) is re­sponsible lot enforcing the most widely applicable laws that prohibit dis­crimination in employment. The small­est of businesses are not subject to most of these statutes. Title I of the Ameri­cans with Disabilities Act (ADA) w hich prohibits employment discrimi­nation against qualified individuals withdisabilities, applies only to employers with 15 or more employees. The same is true for Title VII of the Civil Rights Act or 1964 (Title VII). which prohibits job discrimination based on race, color, religion, sex. and national origin. The … [Read more...]

New HIPAA Rule

The U.S. Department of Health and Human Services has adopted a new rule concerning privacy and security for health information, to take into account changes that have occurred in health care since enactment of the Health Insurance Portability and Accountability Act (HIPAA) of 1996. Some of the key features in the 563-page final rule are outlined below. Privacy notices given by covered entities, such as health-care providers and health plans, must now include a statement about a particular to restrict the disclosure of his or her health information when paying out of pocket for the service. "Downstream" business associates of covered … [Read more...]


Kirk owned a home in a residential community that was overseen by a homeowners association. His property abutted one of a handful of lakes in the community. Legally, the lakes were regarded as common areas controlled by the association. When Kirk bought his home many years ago, the only recorded document imposing restrictions on his use of the property was a two-page document with general restrictions for all homeowners in the community. The only mention of the lakes was an irrelevant limit on how far a boat pier could extend into a lake. The association amended its rules to prohibit the use of pontoon boats having more than two pontoons … [Read more...]

Protect Your Plastic

As new technologies change the way we pay for things, criminals are managing to keep pace as they devise ways to separate you from your money. Doing what you can to protect yourself is one part understanding the technology and at least equal portions of vigilance and common sense. Still, we can all benefit from some reminders. "Phishing" refers to out-of-the-blue e-mails, text messages, or phone calls from superficially legitimate sources, often couched in urgent tones, asking for your credit card or debit card information. The thieves then set up counterfeit cards and run up charges on your accounts. Don't take the bait. You might think … [Read more...]

Employees Are Responsible for Beneficiary Designations

The federal Employees' Group Life Insurance Act of 1954 (KEGLIA) establishes an S824 billion program providing low-cost life insurance for hundreds of thousands of federal employees. It allows an employee to name a beneficiary of life insurance proceeds, and specifies an "order of precedence" providing that the employee's death benefits accrue first beneficiary ahead of other potential recipients. In 1996, when he was one of those federal employees who could participate in the FEGLIA program, Warren named Judy, his wife at the time, as the named beneficiary on his life insurance policy. In 1998, the couple divorced. In 2002. Warren married … [Read more...]

Limited Liability Companies — The Best of All Worlds?

A limited liability company (1 is a business structure that combines some of tin: best features of sole proprietorships, partnerships, corporations. LLC owners like their counterparts for partnerships or sole proprietorships. report profits or losses on their personal income tax returns. Like a corporation, however, the owners of an LLC have "limited liability," that is. they are shielded from personal liability for debts and claims arising from the business. Limited Liability The limited liability for LLC owners is not absolute. Owners still can be held liable if they (I) personally and directly injure someone; (2) personally guarantee … [Read more...]