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Income Tax Tips: Business Insurance

Income Tax Tips: Business Insurance

Insurance serves many purposes for a business. You’ll need insurance to protect your business from property damage, personal injury suits, and other forms of financial loss. In addition, you may want to provide your employees with certain types of insurance (e.g., group health and life insurance) to attract and retain them. One of the issues you’ll face as a business owner involves the tax treatment of business-related insurance. Just what can you deduct, and how do you handle insurance reimbursements? Here’s an overview of what you should know.

Your business may be able to deduct insurance premiums paid

A business can deduct certain business expenses that it has properly paid. To be deductible, business expenses must be both ordinary (i.e., common and accepted in your field of business) and necessary (i.e., appropriate and helpful for your business). Your company may be able to deduct–as a business expense–insurance premiums paid for a variety of coverages. These include:

  • Fire, theft, flood, or other casualty insurance
  • Employee group medical insurance
  • Life insurance provided for the benefit of employees
  • Business liability insurance
  • Professional malpractice insurance
  • Business interruption insurance (pays for lost profits in certain cases if your business is shut down)
  • Auto and other vehicle insurance used for business (unless the standard mileage rate is used to figure car expenses)
  • Credit insurance (covers losses from unpaid debts)

However, if your business is the beneficiary of a life insurance policy (either directly or indirectly), it can’t deduct the life insurance premiums it pays on behalf of an owner, employee, or any person who has a financial interest in the business. This also applies to split dollar life insurance coverage on key employees–the business can’t deduct the premiums.

What happens if your business property is damaged, destroyed, or stolen?

If your business suffers a property-related loss, you should read your business insurance policy carefully to find out what is and isn’t covered. Your policy should explain the types of property coverages, list the specific perils that your business is insured against (e.g., damage caused by fire, theft, and hail), describe the exclusions from coverage (e.g., damage caused by a flood or earthquake), and detail any conditions you must meet for coverage to apply.

In many cases, your business insurance policy will reimburse your business for a given loss. Sometimes, though, you’ll be only partially reimbursed or not compensated at all. In such cases, your business may be entitled to some tax relief. In general, a reasonable insurance reimbursement is not taxable. If you receive reimbursements, subtract them from your total loss. The unreimbursed portion of your loss may be deductible. But if the amount of your reimbursement exceeds the loss, you may have to report taxable income (see a tax professional for exceptions to this rule).

If your business property is damaged or destroyed in an accident, by an act of nature (e.g., storm), or through theft or vandalism, and your policy does not completely reimburse your business for the loss, your business may be entitled to claim a casualty loss tax deduction. (A casualty is direct damage, destruction, or loss of property resulting from an identifiable event that is sudden, unexpected, or unusual.)

Calculating the amount of your casualty or theft loss deduction

If there’s a casualty loss, a company can deduct 100 percent of the loss against business income (assuming there’s no insurance reimbursement). To compute a business casualty loss deduction, you’ve got to know three things:

  • The decrease in the fair market value (FMV) of the property as a result of the loss
  • Your adjusted basis in the property before the casualty or theft (adjusted basis is usually the property’s original cost, plus the cost of improvements, minus depreciation)
  • The amount of the insurance reimbursement that you receive (or the salvage value)

If your property was damaged but not destroyed, the casualty loss equals the decrease in the property’s FMV as a result of the damage, minus any insurance reimbursements. If your property was completely destroyed, ignore the FMV and compare the adjusted basis of the property before the incident to the insurance reimbursement. You can deduct the amount by which the adjusted basis exceeds the insurance reimbursement.

Remember, if your property is covered by insurance, an insurance claim must be filed; otherwise, the casualty loss deduction is not allowed. Use IRS Form 4684 to calculate and report all casualty losses or gains.

Handling other types of business insurance proceeds

Business interruption insurance pays for lost profits if your business is shut down due to a fire or other covered cause. You should report any insurance proceeds as ordinary income. Any credit insurance proceeds should also be reported as ordinary income.

What if you’re self-employed?

If you own your own business, you can also deduct most ordinary and necessary business expenses against business income. However, different rules may apply if you’re self-employed and your business provides group insurance benefits to its employees. Although a business can generally deduct the cost of group insurance premiums, you may be unable to deduct those insurance premiums that benefit you personally. Alternatively, your deduction may be limited. This is true even if you provide similar benefits to your employees and are able to deduct the cost of those benefits.

For example, assume you are a sole proprietor and maintain a group health employee benefit plan. Your business deducts the costs associated with the plan. However, any expenditures (e.g., premiums) made for your own benefit are generally not deductible as a business expense. You can get around this, though, if your spouse is an employee of your business, participates in the group health plan, and covers you under a family plan.

If you’re self-employed and can’t deduct your health insurance premiums and other medical costs as a business expense, you may qualify for the self-employed health insurance deduction. This deduction enables you to deduct 100 percent of the cost of health insurance that you provide for yourself, your spouse, and your dependents. If some of your health insurance premiums do not qualify for the self-employed health insurance deduction, you may still be able to deduct them on Schedule A of your Form 1040, assuming that you itemize and meet all other requirements. (The definition of self-employed for this purpose includes sole proprietors, partners, and owners of more than 2 percent of an S corporation.)

Disclosure:The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Sterling Group United recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions

Understanding Individual 401(k) Plans

Understanding Individual 401(k) Plans

If you’re self-employed or own a small business, you’ve probably considered establishing a retirement plan. If you’ve done your homework, you likely know about simplified employee pensions (SEPs) and savings incentive match plans for employees (SIMPLE) IRA plans. These plans typically appeal to small business owners because they’re relatively straightforward and inexpensive to administer. What you may not know is that in many cases an individual 401(k) plan (which is also known by other names such as a solo 401(k) plan, an employer-only 401(k) plan, a single participant 401(k) plan, or a mini 401(k) plan) may offer a better combination of benefits. An individual 401(k) plan is worth considering if you’re looking to set up your first retirement plan or want to switch to a different plan.

What is an individual 401(k) plan?

An individual 401(k) plan is a regular 401(k) plan combined with a profit-sharing plan. However, unlike a regular 401(k) plan, an individual 401(k) plan can be implemented only by self-employed individuals or small business owners who have no other full-time employees (an exception applies if your full-time employee is your spouse). If you have full-time employees age 21 or older (other than your spouse) or part-time employees who work more than 1,000 hours a year, you will typically have to include them in any plan you set up, so adopting an individual 401(k) plan will not be a viable option.

Note: An individual 401(k) plan isn’t really a different kind of 401(k) plan. Rather, it simply takes advantage of the fact that relaxed rules apply when the only individuals who participate in the plan are the owner and the owner’s spouse.

What makes an individual 401(k) plan attractive?

One feature that makes an individual 401(k) plan an attractive retirement savings vehicle is that in most cases your allowable contribution to an individual 401(k) plan will be as large or larger than you could make under another type of retirement plan.

With an individual 401(k) plan you can elect to defer up to $17,500 of your compensation to the plan for 2013 ($23,000 if you are age 50 or older by the end of the calendar year), just as you could with any 401(k) plan. In addition, as with a traditional profit-sharing plan, your business can make a maximum tax-deductible contribution to the plan of up to 25 percent of your compensation (slightly less than that if you are a sole proprietor or unincorporated).

Because the amount of compensation deferred as part of a 401(k) plan does not count toward the 25 percent limit, you, as an owner-employee, can defer the maximum amount of compensation under the 401(k) plan, and still contribute up to 25 percent of total compensation to the profit-sharing plan on your own behalf. Total plan contributions for 2013 cannot, however, exceed the lesser of $51,000 or 100 percent of your compensation (plus any catch-up contributions if you’re 50 or older).

For example, Dan is 35 years old and is the sole owner of an incorporated business. His compensation in 2013 is $80,000. Dan sets up an individual 401(k) plan for his retirement. Under current tax law, Dan’s plan account can accept a tax-deductible business contribution of $20,000 (25 percent of $80,000), plus a 401(k) elective deferral contribution of $17,500. As a result, total plan contributions on Dan’s behalf equal $37,500, which falls within Dan’s contribution limit of $51,000 (the lesser of $51,000 or 100 percent of his compensation).

These contribution possibilities aren’t unique to individual 401(k) plans; any business establishing a regular 401(k) plan and a profit-sharing plan could make similar contributions. But individual 401(k) plans are simpler to administer than other types of retirement plans. Since they cover only a self-employed individual or business owner and his or her spouse, individual 401(k) plans are not subject to the often burdensome and complicated administrative rules and discrimination testing that are generally required for regular 401(k) and profit-sharing plans.

Note: Individual 401(k) plans weren’t always so attractive. Prior to the enactment of the Economic Growth and Tax Relief Reconciliation Act of 2001 (2001 Tax Act), 401(k) contributions had to be counted toward the business’s maximum profit-sharing contribution (which was itself limited to 15 percent).

Note: You can design your individual 401(k) plan to let you designate all or part of your elective deferrals as Roth 401(k) contributions. Roth 401(k) contributions are made on an after-tax basis, just like Roth IRA contributions. Unlike pre-tax contributions to a 401(k) plan, there’s no up-front tax benefit–contributions are transferred to the plan after taxes are calculated. Because taxes have already been paid on these amounts, a distribution of your Roth 401(k) contributions is always free from federal income tax. And all earnings on your Roth 401(k) contributions are free from federal income tax if your distribution is “qualified.”

Other advantages of an individual 401(k) plan

Large potential annual contributions and straightforward administrative requirements are appealing, but individual 401(k) plans also have other advantages, which are shared by many other types of retirement plans:

  • An individual 401(k) is a tax-deferred retirement plan, so you pay no income tax on plan contributions or earnings (if any) until you withdraw money from the plan (qualified distributions from Roth 401(k) accounts are entirely free from federal income taxes). And, your business’s contribution to the plan is tax deductible.
  • Contributions to an individual 401(k) plan are completely discretionary. You should always try to contribute as much as possible, but you always have the option of reducing or even suspending plan contributions if necessary.
  • An individual 401(k) plan can allow loans and may allow hardship withdrawals if necessary.
  • An individual 401(k) plan can accept rollovers of funds from another retirement savings vehicle, such as an IRA, a SEP, or a previous employer’s 401(k) plan.

Disadvantages of an individual 401(k) plan

Despite its attractive features, an individual 401(k) plan is not the right option for everyone. Here are a few potential drawbacks:

  • An individual 401(k) plan, like a regular 401(k) plan, must follow certain requirements under the Internal Revenue Code (IRC). Although these requirements are much simpler than they would be for a regular 401(k) plan with multiple participants, there is still a cost associated with establishing and administering an individual 401(k) plan.
  • Institutions offering individual 401(k) plans often provide limited investment choices. However, investment options are likely to increase in the future as demand for the individual 401(k) increases among small business owners.
  • Self-employed individuals and small business owners with significant compensation can already contribute a maximum $51,000 (for 2013) by using a traditional profit-sharing plan or SEP plan. An individual 401(k) plan will not allow contributions to be made above this limit (an exception exists for catch-up contributions that can be made by individuals age 50 or older).
  • An individual 401(k) may not meet your future needs. If your business grows and you hire a full-time employee who is not your spouse, that employee will generally need to be included in your plan. If that happens you no longer have an individual 401(k) plan; you have a regular 401(k) plan and profit-sharing plan, and you lose the benefit of the individual 401(k) plan’s simplified administration rules.
  • In general, individual 401(k) plans are not subject to the Employee Retirement Income Security Act of 1974 (ERISA). While this means there are less administrative requirements, it also means that these plans may have less creditor protection than 401(k) plans that are covered by ERISA. If creditor protection is important to you, consult a qualified professional.

Disclosure:The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Sterling Group United recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions

Income Tax Tips: Business Insurance

Income Tax Tips: Business Insurance

Insurance serves many purposes for a business. You’ll need insurance to protect your business from property damage, personal injury suits, and other forms of financial loss. In addition, you may want to provide your employees with certain types of insurance (e.g., group health and life insurance) to attract and retain them. One of the issues you’ll face as a business owner involves the tax treatment of business-related insurance. Just what can you deduct, and how do you handle insurance reimbursements? Here’s an overview of what you should know.

Your business may be able to deduct insurance premiums paid

A business can deduct certain business expenses that it has properly paid. To be deductible, business expenses must be both ordinary and necessary. Your company may be able to deduct–as a business expense–insurance premiums paid for a variety of coverages. These include:

  • Fire, theft, flood, or other casualty insurance
  • Employee group medical insurance
  • Life insurance provided for the benefit of employees
  • Business liability insurance
  • Professional malpractice insurance
  • Business interruption insurance (pays for lost profits in certain cases if your business is shut down)
  • Auto and other vehicle insurance used for business (unless the standard mileage rate is used to figure car expenses)
  • Credit insurance (covers losses from unpaid debts)

However, if your business is the beneficiary of a life insurance policy (either directly or indirectly), it can’t deduct the life insurance premiums it pays on behalf of an owner, employee, or any person who has a financial interest in the business. This also applies to split dollar life insurance coverage on key employees–the business can’t deduct the premiums.

What happens if your business property is damaged, destroyed, or stolen?

If your business suffers a property-related loss, you should read your business insurance policy carefully to find out what is and isn’t covered. Your policy should explain the types of property coverages, list the specific perils that your business is insured against (e.g., damage caused by fire, theft, and hail), describe the exclusions from coverage (e.g., damage caused by a flood or earthquake), and detail any conditions you must meet for coverage to apply.

In many cases, your business insurance policy will reimburse your business for a given loss. Sometimes, though, you’ll be only partially reimbursed or not compensated at all. In such cases, your business may be entitled to some tax relief. In general, a reasonable insurance reimbursement is not taxable. If you receive reimbursements, subtract them from your total loss. The unreimbursed portion of your loss may be deductible. But if the amount of your reimbursement exceeds the loss, you may have to report taxable income.

If your business property is damaged or destroyed in an accident, by an act of nature (e.g., storm), or through theft or vandalism, and your policy does not completely reimburse your business for the loss, your business may be entitled to claim a casualty loss tax deduction.

Calculating the amount of your casualty or theft loss deduction

If there’s a casualty loss, a company can deduct 100 percent of the loss against business income (assuming there’s no insurance reimbursement). To compute a business casualty loss deduction, you’ve got to know three things:

  • The decrease in the fair market value (FMV) of the property as a result of the loss
  • Your adjusted basis in the property before the casualty or theft (adjusted basis is usually the property’s original cost, plus the cost of improvements, minus depreciation)
  • The amount of the insurance reimbursement that you receive (or the salvage value)

If your property was damaged but not destroyed, the casualty loss equals the decrease in the property’s FMV as a result of the damage, minus any insurance reimbursements. If your property was completely destroyed, ignore the FMV and compare the adjusted basis of the property before the incident to the insurance reimbursement. You can deduct the amount by which the adjusted basis exceeds the insurance reimbursement.

Remember, if your property is covered by insurance, an insurance claim must be filed; otherwise, the casualty loss deduction is not allowed. Use IRS Form 4684 to calculate and report all casualty losses or gains.

Handling other types of business insurance proceeds

Business interruption insurance pays for lost profits if your business is shut down due to a fire or other covered cause. You should report any insurance proceeds as ordinary income. Any credit insurance proceeds should also be reported as ordinary income.

What if you’re self-employed?

If you own your own business, you can also deduct most ordinary and necessary business expenses against business income. However, different rules may apply if you’re self-employed and your business provides group insurance benefits to its employees. Although a business can generally deduct the cost of group insurance premiums, you may be unable to deduct those insurance premiums that benefit you personally. Alternatively, your deduction may be limited. This is true even if you provide similar benefits to your employees and are able to deduct the cost of those benefits.

For example, assume you are a sole proprietor and maintain a group health employee benefit plan. Your business deducts the costs associated with the plan. However, any expenditures (e.g., premiums) made for your own benefit are generally not deductible as a business expense. You can get around this, though, if your spouse is an employee of your business, participates in the group health plan, and covers you under a family plan.

If you’re self-employed and can’t deduct your health insurance premiums and other medical costs as a business expense, you may qualify for the self-employed health insurance deduction. This deduction enables you to deduct 100 percent of the cost of health insurance that you provide for yourself, your spouse, and your dependents. If some of your health insurance premiums do not qualify for the self-employed health insurance deduction, you may still be able to deduct them on Schedule A of your Form 1040, assuming that you itemize and meet all other requirements.

Disclosure:The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Sterling Group United recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions

What Employers Need to Know About Workers Compensation Insurance

What Employers Need to Know About Workers Compensation Insurance

All states and the District of Columbia have workers’ compensation laws designed to protect employed individuals who get sick, injured, or killed on the job. Employers pay the cost of workers’ compensation by purchasing private insurance or state-sponsored insurance, or sometimes by self-insuring. Each state has its own workers’ compensation system, so the rules vary. As a business owner, you should know the following facts about workers’ compensation.

Workers’ compensation is a mandatory state-based insurance program

Workers’ compensation is a mandatory state-based social insurance program that provides workers with insurance protection against disability or death that occurs while at work. In most states, the workers’ compensation laws are compulsory and require businesses to accept the laws’ provisions and provide the specified benefits. In some states, coverage is elective, and employers can opt out of the state workers’ compensation system in exchange for the loss of certain liability limitations. Some states exempt businesses with fewer than three or four employees from workers’ compensation insurance requirements.

It provides employees with benefits in the event of a workplace injury

Workers’ compensation protects workers from workplace injuries, repetitive stress injuries, and occupational diseases. It pays four types of benefits:

  • Medical benefits
  • Disability benefits
  • Survivor’s benefits
  • Rehabilitation benefits

Employees who are injured or disabled on the job receive a fixed monetary award. In exchange, they give up the right to sue the business. If an employee dies as a result of a workplace injury, benefits are paid to the employee’s family.

Your business is responsible for providing coverage

Businesses are, by law, 100 percent responsible for providing workers’ compensation benefits. Your business can’t charge a worker for benefits provided under workers’ compensation or for any portion of the business’s workers’ compensation insurance premium.

Keep in mind that your business may be required by the laws of your state to post a notice in the workplace that provides the name of the workers’ compensation insurance carrier.

The rules for coverage vary by state

Your state mandates how much coverage you must buy, which employee classifications must be covered, and what percentage of an employee’s salary you’ll pay if he or she misses work due to a work-related injury.

Failure to carry workers’ compensation coverage, when required, may be punishable by fines, civil penalties, criminal penalties, exclusion from public contracts, and cease and desist orders. The rules and penalties vary by state.

All employees generally must be covered

Generally, all employees must be covered under state workers’ compensation systems. However, each state excludes certain classifications of workers from among the following:

  • Business owners
  • Independent contractors
  • Casual workers
  • Domestic employees in private homes
  • Farm workers
  • Unpaid volunteers
  • Maritime workers
  • Railroad employees (benefits are received under a separate federal law)
  • Federal government employees (benefits are received under a separate federal law)

Most workplace injuries are covered on a no-fault basis

Most on-the-job injuries are covered by workers’ compensation on a no-fault basis. That is, benefits are paid regardless of who is to blame for the accident or injury–the employer does not admit liability for the injury or illness, and the employee receives workers’ compensation benefits without having to sue. There are exceptions, though. For example, coverage may be excluded for injuries suffered when an employee’s conduct violates company policy.

Some accidents outside the workplace are covered

In most cases, your business is not liable for accidents occurring outside the workplace. However, there are situations when an employee is covered outside the workplace. Employees are covered if they are injured while:

  • Traveling on company business
  • Running a work-related errand
  • Attending a required business-related social event

Injured employees have the right to file for benefits

It is an injured worker’s right to claim benefits under workers’ compensation for a job-related illness or injury. When a worker is injured on the job, his or her claim is filed with the insurance company (or self-insuring employer). Medical and disability benefits are paid by the insurer according to a state-approved formula.

Your business can’t interfere with, coerce, discriminate, fire, or force the resignation of an employee for filing a claim under workers’ compensation. Your business can’t tell an employee not to file a claim. If an employee can prove that a business in any way harassed or fired him or her for seeking benefits, the employee can file a civil lawsuit seeking substantial damages.

Disclosure:The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Sterling Group United recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.

Insuring Your Home Business

Insuring Your Home Business

If you have recently started your own business and work out of your home, you’ll probably need to upgrade your insurance program. At-home business owners often make the mistake of assuming that their homeowners policy covers their business equipment. In fact, your homeowners policy may include little or no coverage for your business property and business liability exposure. You also should consider the need for business interruption insurance, workers’ compensation coverage, and business automobile coverage. Finally, you should examine your need for life, health, and disability insurance.

Homeowners policy

Homeowners policies generally cover business property on your premises only to a certain limit. This is usually about $2,500. Coverage for business property away from your premises is even more limited. Most policies have a $250 maximum. That is the extent of insurance coverage for your business in the typical homeowners policy. You are not covered for business liabilities, including such things as a deliveryperson or a client injuring themself while on your property.

For a higher premium, some insurance companies offer an endorsement that you can add to the standard homeowners policy. An endorsement allows you to increase the liability limit for business property and add a small amount of general liability coverage. The endorsement is designed for very small businesses. However, even with an endorsement, your business is left with uncovered exposures.

Home office policy

Many insurance companies now offer the home office policy. This is a combination of a homeowners policy and a business owners policy. This policy provides adequate business liability coverage, business interruption coverages, and increased limits for your business property. Along with the traditional coverages found in a homeowners policy.

The business property limits typically begin at $10,000. Depending on the policy, the business liability limits may range from $300,000 to $1 million. The policy covers lost income and continuing expenses for up to one year in the event your home is damaged and you’re unable to work. The policy also covers loss of valuable papers and accounts receivable. All while offering higher limits for equipment breakdown coverage and business property used off-premises.

Business owners policy

This type of commercial policy is designed specifically for small businesses. Traditional business owners policies (BOPs) are very comprehensive because they cover buildings, business property used on- and off-premises, and liability. Also covered are computers and other business equipment, software, data, loss of income, continuing expenses, and professional liability for certain occupations.

Some insurance companies have created a new kind of BOP designed specifically for the at-home business. This policy is less expensive, and it provides broad-enough coverage for a larger business without duplicating your coverage. Please note, the new BOP would not cover your home structure, because it is already covered by your homeowners policy.

Umbrellas and professional liability

An umbrella policy provides increased liability limits beyond those in separate policies. For example, say you have a BOP with a general liability limit of $3 million. If you think you’ll need more than $3 million for your business, an umbrella policy will pick up where the BOP leaves off. If you purchase an umbrella policy with a $5 million limit, your total limit of liability would be $8 million.

For those in occupations that are particularly vulnerable to professional liability, a separate professional liability policy, usually called malpractice coverage or errors and omissions coverage, is a must. Examples of such professions include law, medicine, architecture, day care, and personal beauty.

Automobile insurance

If you use your personal automobile extensively for your own business, you’ll probably need to purchase a commercial automobile insurance policy. Examples of such small businesses are painters, caterers, and contractors. If you use your automobile as part of your business (e.g., a taxi service), you definitely need a commercial policy.

If you rent automobiles in the course of traveling for your own business, check your personal auto policy to see if it covers nonowned autos. Your auto insurance provider can help you determine the extent of your coverage and fill in any gaps.

Workers’ compensation

Even if you have only one employee, you need workers’ compensation insurance. Each state has its own minimum requirements for this type of coverage–contact your insurance agent or state insurance department for details.

Life insurance

Chances are, you already have a life insurance program in place. Though your individual life insurance needs may not change when you start an at-home business, the amount of insurance you have may change. For example, if you lost employer-sponsored coverage when you left your previous job, you may want to make up the difference so that you’re still adequately protected. You may also need more insurance to cover any debts or liabilities you took on to develop your business.

Key person life insurance

Key person life insurance covers financial loss to your business due to the death of your partner or a key employee. If the covered individual dies, your company receives a death benefit. There are several creative ways you can set up a key person life insurance plan. Contact your financial professional to set up the best arrangement for your business.

Disability insurance

This type of insurance is very important to consider when you have your own business. Ask yourself if you have enough resources to support your family if you became disabled and could not work. If you do have some savings, how long would they last? Most people need disability insurance to protect against the loss of income that can result from disability. Your ability to produce an income is an asset that should be covered like your house and your car.

Health insurance

Health insurance for the self-employed can be expensive and difficult to find. One affordable alternative may be to join a professional association that offers group health insurance to its members. Chances are, your profession has its own specific association in your area or state. If not, there are associations for small-business owners in general. Finally, your local chamber of commerce may have a health insurance program for its members.

Individual health insurance is very expensive. One way to buy yourself protection before finding a permanent health plan may be to purchase short-term health insurance. You will need to check if those policies are allowed in your state. These policies run from one to six months and are relatively inexpensive.

Meet with a trusted insurance advisor

With all you have to think about in starting and running your own business, reviewing and updating your insurance program can seem like an overwhelming task. Call us today and set up a complimentary consultation with one of our experienced and licensed insurance advisors. We can identify your needs, familiarize you with the relevant state laws, and recommend a suitable insurance program to meet them.

Disclosure:The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Sterling Group United recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.

5 Reasons You Should Hire a Business Broker  

5 Reasons You Should Hire a Business Broker  

A business broker is a professional who can achieve several benefits for your company if you’re planning on selling it. Most companies want to preserve their business operations and reputation. They want to do whatever it takes to protect customers and key employees. With the help of a business broker, that becomes possible. Here are a few key reasons why you need one.

#1: Provide a Financial Analysis and Full Valuation

What you believe your business is worth isn’t necessarily what someone will pay for it. That’s an important factor to keep in mind. With the help of a business broker, you can ensure you have accurate information to share on the business’s financial health and earnings. You’ll also have a verifiable valuation that buyers want to see.

#2: Market Your Business Well

Finding a buyer is not as simple as it sounds. You may not want any buyer but the one that offers the objects and purchase price you need. A business broker can effectively create marketing materials to locate the ideal buyer for your company.

#3: Minimize Private and Confidentiality Losses

Many companies plan to make this sale happen, but they know the importance of keeping the entire process confidential. When you provide a business broker with this task, he or she can work to ensure proper disclosure statements are always used when interviewing or speaking about the sale.

#4: Buffer Between the Buyer and Seller

Like in any transaction, it is critical to have someone handling the negotiations for you. Your business broker can do that. He or she works as a buffer to communicate the details of the transaction. Many buyers want to work in this way because working with the seller can be difficult just due to the emotions in the process.

#5: Assist with the Financials

Your business broker will also work with you on the financials, giving you the tools and resources you need to get the maximum amount at closing.

Take the Steps Necessary to Ensure Your Business Is Thriving

No matter what risks you’re facing today, know that there’s help available to your business at Sterling Financial. Contact our professionals today to learn more about hiring a business broker and what this single move can do for your business and transactions.