Tax Service Discount Coupon

For a limited time only, present this coupon for a $25.00 discount on tax service. We will also review your previous 3 years' tax returns FREE (You may be eligible for a larger refund!) Call Palma Financial Services in Dublin, CA 925-307-5454.

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5 Ways to Make Your Small Business Successful (That You've Probably Never Heard Of)

Are you a small business owner? If so, then allow me to give you a big “high five” for propping up the American economy at a time of uncertainty and lots of negativity.

Studies consistently show that small businesses – that is, businesses loosely defined as independently owned and operated, not dominant in their market or industry, and with a modest number of employees – employ more than half the American workforce.

However, recent studies also suggest that startups have declined and failure rates of these small businesses have accelerated. And with that comes the never-ending news from naysayers and news outlets, which then fuels the data for these studies. It's a vicious cycle that becomes a self-fulfilling prophecy.

I am here to tell you that you don’t have to pay too much attention to it, and that failure does not have to apply to you, your business, or your next big idea. In fact, I am betting on your success, and I am making some powerful, simple suggestions to help you on your way.

Follow these steps and become the CEO of your own future:

Incorporate. A lot of new business owners overlook this step because they are small mom-and-pop organizations called “sole proprietorships.” In those cases, it pays to start out by creating an S-corp. This tax status allows the owner – usually a one or two-person shop – to treat themselves like an employee. They have to pay themselves a reasonable wage, and they are eligible to receive disability or unemployment benefits. This is a helpful safety net for a family if dad's or mom’s business is foundering. Another incorporation status is the LLC, which provides some protection from liability but can also garner more attention from various authorities in certain states because they are so widely used (and abused).

Set up a defined benefit plan. This works hand-in-hand with incorporation. Once a business owner has completed that step, they can set up a defined benefit plan to make sure employees (i.e., themselves if they are a small enough operation) get fixed monthly payments in retirement based on their earnings, tenure and age, among other things. The owners have a reasonable expectation of what they will receive in retirement based on their own hard work, instead of depending on investments to fund their lifestyle after their working years.

Purchase life insurance. Using after-tax dollars, fund a life insurance policy for retirement – or other expenses that pop up. If an emergency arises, these accumulated funds can be tapped to cover them without paying a penalty (i.e., taxes). Policy holders can also loan themselves funds from the policy and can pay them back once conditions improve. However, they are not required to do so. These policies earn interest by being anchored to the performance of major stock indexes, yet maintain a certain “floor” if those indexes tumble. This limits losses and provides more flexibility than traditional retirement accounts.

Invest in real estate. Many financial planners will recommend buying money-making tools from which they receive a commission. At Palma Financial Services, we stress the value of real estate as an investment option. If a small business owner also purchases the building they occupy, they are lining up expenses for an overall maximum benefit to themselves. First, they are paying rent to themselves, not a third party. This money goes toward an asset, not into someone else’s pocket. Second, owning the building creates a tax haven by allowing them to claim the depreciation of the building in their tax returns.

And finally, it’s important to refresh your mind and spirit. Play golf, ride a bike, go hiking or pursue a hobby. If business owners join a group that enjoys the same interests, it can be a great way to network and drum up business.

In the meantime, keep your distance from the dire financial news.

We have to realize that there is still a lot of money there. There’s plenty of money. I just finished tax season, and many of my clients are still amazed at how much money they were making. You have to refocus when the economy is bad. But there’s only so much of that you can do. You have to look inside. And the No. 1 way is to get away from the naysayers. Get those negative vibes out of your head, and launch something that will make the world a better place.

Check out these links for additional resources to help start a new small business:

Small Business Administration
This entity is backed by the federal government and offers excellent advice on business plans, structures of organization, low-interest loans and more. This page collects many useful resources in one spot.

Small Business Trends
This award-winning online magazine was founded 10 years ago by a corporate attorney and covers all topics related to small businesses. Want to know which industry you should NOT enter? This handy list of failure rates of small business BY SECTOR for 2012 helps you avoid pitfalls before you get started.

Inc
This online and print magazine is a must-read for any small business owner. Chock full of the latest ideas, it offers dozens of handy tips across a variety of categories. This page gives great advice for a successful “exit strategy” – that is, the moment you sell the business and move on. On the other end of the spectrum, Inc also offers this page for advice for small business financing.

Entrepreneur
Like Inc, this online and print magazine should have a place in the office. Its content is eye candy for anyone who wants to start a new business. This page discusses a very important step that will help make a small business successful: knowing who the customers are, how the product or services is different than the competition, and how can it grow.

For more helpful information on a variety of business-related topics, check out our Articles page.

Alternative Uses of Life Insurance Help College, Retirement

Americans aren't saving enough money, hampering their ability to save up for their ideal retirement experience or top-notch college education for the kids, a new study suggests.

They are not laying the foundation now for brighter days in the future. Surely the sagging US economy hasn't helped much since 2007, but even before the bubble burst, we were generally not very good at socking money away for the future.

New information from the Employee Benefit Research Institute shows that the number of Americans with less than $25,000 in savings (excluding their homes) has increased to 57 percent from 49 percent in 2008. According to the Wall Street Journal, who wrote about the survey earlier this month, about 28 percent of Americans are not confident they will have enough money to retire comfortably – a record high for the institute's study.

Half the people surveyed said they were not sure where they would come up with $2,000 if something came up. According to the story:

"Workers are recognizing there is a crisis," said Alicia Munnell, director of the Boston College Center for Retirement Research. She noted that companies continue to do away with traditional pensions. The survey of workers and retirees was conducted in January, even as the U.S. stock market was heading toward new highs.

Planning now is essential to getting yourself on a firm footing for when more money is flowing through the economy and your accounts again. Consider using life insurance for the following reasons:

Roth IRA accounts have a limit on tax-free contributions ($5,500 in 2013), but life insurance does not have a limit on contributions. Section 529 plan for college can grow tax free, but if the child decides not to go to college, the money is taxed like an IRA. With life insurance, if the policy holder passes away, the money can be used to cover a variety of family costs (i.e., college expenses) tax free, depending on the plan.

Section 529 plans can have volatile returns, but life insurance payments -- although more conservative -- remain constant. The trick is to project costs far out into the future and juggle that with earning potential over time to arrive at the correct payments to give policy holders their perfect retirement lifestyle. And life insurance funds can be accessed at any time, not just when the kids go off to college.

Keep this in mind the next time you are considering financial tools for education and retirement. If you have more questions or need more information, our staff at Palma Financial Services stands ready to help.

Just Married? Plan for Your Future with Life Insurance

Newly married couples have many pressing items on their to-do lists, but one task that often falls by the wayside is purchasing life insurance. Although you may not think about it as often as you do, say, car insurance, life insurance plays such an integral role in a new couple’s financial plan.

Why? Planning for your life together may include buying a house or having kids, which means your financial obligations could multiply in the years ahead. And if this is not your first marriage, you may already have children who depend on you for their wellbeing or an ex-spouse whose well-being you need to consider. A new spouse, step-children or future children only add to your responsibilities. Making sure all of your dependents have adequate protection in case you died is a necessary step in establishing your family finances.

Consider the risks: If either of your salaries is lost due to one of you passing away, the surviving spouse may suffer financially – especially in today’s economy. There is no denying it would be extremely difficult for the surviving spouse to maintain your current lifestyle without both incomes. The funds a life insurance benefit provides could help prevent a financial hardship.

The financial risks of losing a spouse could be serious, and no matter what life stage you and your spouse are in, age shouldn’t discourage you from purchasing life insurance. Life insurance is important to young couples with little savings to get them through, as well as older couples with extensive assets to protect.

Although couples don’t want to think about the death of their partner, a life insurance benefit can help the surviving spouse continue to meet living expenses, avoid debt and have a comfortable retirement. Just as you would update your personal records to show you’ve gotten married, so should you update your life insurance to reflect your status as a newlywed.

If you have any questions about life insurance please call us at Palma Financial Services.

American Dream Events Help to Modify Mortgages

Neighborhood Assistance Corporation of America (NACA) will be hosting four American Dream Events in California during April where they will be modifying mortgages the same day and you can apply for incredible assistance.

California has been allocated $2 Billion for the following (click here for more details):
· Principal Reduction – up to $100,000
· Unemployment Assistance – up to $27,000
· Mortgage Reinstatement – up to $25,000
· Transition Assistance (last resort) – up to $5,000

Don’t miss this great opportunity to take advantage of these tremendous benefits through California's “Keep Your Home California” program! During the event NACA has certified counselors on site to meet with you face to face for this program.

Come to the American Dream Events to access this assistance and meet face-to-face with your lender. Many homeowners obtain same day solutions reducing their mortgage payment by hundreds and sometimes over a thousand dollars to achieve an affordable payment with interest rates as low as 2% and/or large principal reductions.

California Events (each event from 8:00 a.m. – 6:00 p.m. for five days):
San Francisco, CA – Friday April 5th – Tuesday April 9th , San Francisco Marriott Marquis, 55 Fourth St. (click for flyer)
Los Angeles, CA – Thursday April 11th – Monday April 15th, Los Angeles Convention Center, 1201 South Figueroa St. (click for flyer)
Ontario, CA – Thursday April 18th – Monday April 22nd, Ontario Convention Center, 2000 East Convention Center Way (click for flyer)
Sacremento, CA – Thursday April 25th – Monday April 29th, Sacramento Convention Center, 1400 J St. (click for flyer)

You have everything to gain and nothing to lose! It is free. All that is required is an investment of your time and effort. NACA has legally binding agreements with the lenders to get it done. Tell your family, friends, neighbors and co-workers and have them come from near and far. NACA is the largest and most effective HUD certified non-profit homeownership organization.

Bitcoin News Adds Spice to Investment Strategy

Imagine a world in which no one has paper currency. No one has a bank account because there are no banks needed to back them up. Yet goods and services can still be purchased -- online or in person, and without pesky transaction fees.

In this world, everyone has their money elsewhere, using a digital “wallet” that protects their finances the way Fort Knox lords over gold bullion. (Come to think of it, Fort Knox may only be filled with IOUs these days.)

This world isn’t so far away. In fact, it’s happening right now with Bitcoin, a peer-to-peer service that links networked computers competing for its limited currency – bitcoins. This “currency” can then be exchanged for real cash or goods on Amazon.com and from other online retailers.

The meteoric and sometimes-flawed rise of Bitcoin has truly been a spectacle to behold.  For the first time since the currency’s nascent launch in 2009, venture capitalists and investors are lining up to participate by backing related products and tools to help process Bitcoin transactions. Startup companies are now introducing Bitcoin-backed debit cards to use on the street. Even a traditional, brick-and-mortar bank is joining the fray, further legitimizing the currency – which actually started as an online, open-source software project among hackers.

Now anti-money laundering authorities have passed new rules to allow Bitcoin purchases and trading to continue, so long as the businesses that process those transactions register with the authorities and collect information on their customers. And most recently, the economic upheaval in Cyprus has driven investors and traditional banking customers toward bitcoin because of the uncertainty over insured deposits there, creating another spike in its value (around $87 per bitcoin).

With this much attention and crazy returns – Bitcoin currency values hovered around $49 per unit, a jump of 40 percent in 48 hours last week – it’s normal for traditional investors to take notice. Theories abound about its rise.

Let’s compare the Bitcoin investment craze to traditional financial planning tools, such as annuities.

These products offer a guaranteed rate of return until death. Their interest rates, although conservative (say, 3.5 percent compounded) are practically constant. The payments depend on what an investor is willing to contribute over time. Payouts are flexible for monthly installments or a lump sum. And like 401(k) accounts and IRAs, annuities are tax-deferred funds. (To learn more about annuities, check out this June 2012 post.)

Life insurance also has striking differences to holding bitcoins. Investing in the right plan can provide your family with your lost income if you die. It can be earmarked for specific uses, like college educations or capital funds to start a business. It can also settle, medical, funeral and tax issues left behind from your departure.

Now let’s look at Bitcoin. Created by computer programmers, the currency is created by participating computers in the electronic network. Their users have these computers constantly working to solve an encrypted puzzle; once solved and verified by the network, the user is issued a series of bitcoins. This “mining” for bitcoins is a lucrative business. In March, there were roughly 11 million bitcoins in circulation, with a cap of 21 million coins that should be reached in about 150 years, according to BusinessInsider.com. This ceiling helps drive up the value of the coins.

Recent events, however, have occasionally hampered the currency. Since 2011, several Bitcoin transaction-handling companies have fallen prey to hackers, who have relieved their till of thousands of bitcoins. Even user data has unwittingly exchanged hands. In defense of Bitcoin, most of these victims were smaller companies that may not have had their security measures up to snuff. Yet other hiccups involved miners using the wrong version of the Bitcoin software, forcing its creators to briefly take the entire system offline. These controversies – including acting as the go-to currency for buying illegal drugs online to a very recent heist – have been enough to send Bitcoin values briefly tumbling. This graphic is a sobering reminder of Bitcoin’s technological vulnerability.

Bitcoin might make sense for investors like actor Ashton Kutcher, but does it work for you?

Rodrigo Benzaquen, 37, believes it has a bright future. Benzaquen, a former computer programmer who works for an online commerce network, says he has studied Bitcoin for the past eight months. In particular, he has looked at ways to mine bitcoins. He likes the model and the idea, but worries that government interference in the market – either through attempted legislation, lawsuits or the use of widespread computer networks to start mining for bitcoins and blow up the currency – could negatively impact the bitcoin market. Regardless, Benzaquen says it is an investment opportunity for people who like to take big risks and reap big rewards.

At Palma Financial Services, we have the expertise to advise you on bitcoin strategy and conservative investment approaches. Chastened by the recent economic conditions after the bubble burst in 2007, we encourage our clients to consider annuities and other tools with which they can guarantee a safe, happy and well-funded retirement.

And that, my friends, is worth a lot of bitcoins.

Your CPA/Accountant as Personal Financial Specialist

Your tax return is more than a tally of what you owe Uncle Sam. It’s a roadmap to financial planning, giving insight into investment, retirement and estate planning needs.

“Tax season gives us a snapshot of our total financial picture,” said Miguel Palma, CPA/PFS, with Palma Financial Services, Inc. “With W-2s, 1099s and other paperwork handy, it’s an important opportunity to assess where you are and to make adjustments that can move you closer to your financial goals.”

This year, in particular, the need for financial planning is more important. Tax rate changes implemented as part of the American Taxpayer Relief Act passed in January could affect financial strategies. It could make sense, for instance, to accelerate income into a specific time period through capital gain harvesting, income tax bracket harvesting and Roth conversion planning. Portfolio allocation between taxable and non-taxable accounts could also become more important, depending on your circumstance.

“It’s necessary to understand how these changes could affect your financial situation and to plan now for appropriate investment, retirement and estate strategies,” Palma added.

As a CPA with the Personal Financial Planning (PFS) credential, Palma has demonstrated robust knowledge in tax, investment, retirement, estate and insurance planning and committed to ongoing education.

To speak with Miguel Palma about using the tax return for financial planning call Palma Financial Services in Dublin, CA at 925-307-5454 for a free, no-pressure, consultation.

For more information regarding the Personal Financial Specialist credential please see video at http://bcove.me/s1co7s75.