Diverse Community Partners, Inc.

Enjoy The Weekend! “The language of friendship is not words but meanings.”

What is the biggest benefit of forming an LLC? One of the primary benefits is personal liability protection. In most cases, your personal assets—such as your home, savings, and personal property—are protected from business debts and lawsuits.

How does an LLC protect my personal assets? An LLC creates a legal separation between you and your business. If the business is sued or incurs debt, creditors generally cannot pursue your personal assets, provided you maintain proper business practices.

Self-employed. Remember to pay your Social Security and Medicare taxes in addition to your income taxes. Creating and funding a savings account for this purpose can help avoid the cash flow hit each quarter when you pay your estimated taxes.

Tax deductions and tax credits may be the best part of preparing your tax return. Both reduce your tax bill, but in very different ways. Knowing the difference can create some very effective tax strategies that reduce your tax bill.

Bankruptcy is a legal process, governed by federal statute, whereby the debts of an insolvent person are liquidated after being satisfied to the greatest extent possible by the debtor's assets. During bankruptcy, the debtor's assets are held and managed by a court-appointed trustee.

Looking to buy a business? Most buyers don't ask enough questions or require enough financial history to make an informed decision. Any business worth buying should have kept adequate records. The inability or the unwillingness to provide the proper financial information is an indication that the business may be overpriced.

If you are planning to buy a house or anticipate any other transaction that will require proof of income, you may wish to file early. This is especially important if you are self-employed. You can then make your filed tax return available to your bank or other financial institution.

An operating agreement is an agreement, usually a written document, that sets out the rules by which a LLC is to be operated. It is the LLC equivalent of corporate bylaws or a partnership agreement.

Many tax credits are “refundable credits.” This means you can receive a refund even if you owe no income tax. Common examples available to students and parents are the earned income tax credit and the premium tax credit.