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So You Filed Your Taxes. Now What?

Posted By Kenyatta Turner, LegalShield Independent Associate, Friday, May 6, 2016


After filing your taxes there are a few things you can do to prepare yourself for next year’s filing, protect yourself from scammers and even ease worry about a potential audit. This may include storing documents where you can easily find them, protecting your personal financial information from thieves and being ready should you be selected for an audit. 

•    Hold on to your tax documents. Save copies of your return as well as all of the receipts and other documents you use to prepare your taxes. Keep the documents in a safe and accessible location. You may be asked to produce documents to back up your return. Having all of the information organized and accessible will make it easier for you to validate your return should the IRS come calling. It is a good rule of thumb to retain your tax records for six (6) years. While you may not need all of your tax documents for that long, it is better to have them available should you need them.

•    Keep your documents safe. Whether you file online or use a professional you must keep your personal information safe. Tax returns are a goldmine for identity thieves. Never store sensitive information on public computers or transmit financial information through unsecured WiFi. 

•    Watch for signs of identity theft. Your tax information may be at risk of falling into the wrong hand at no fault of your own. Scammers have been targeting human resources and payroll professionals. Scammers have requested W-2s by email using spoofing to pose as company executives. Click here to learn more about this scam. If you believe you may be the victim of identity theft and you have an IDShield membership call (800) 806-3991. If you do not have an IDShield membership visit to learn more.

•    Beware of phony audit or IRS correspondence. If you receive a phone call at home or work from someone claiming to be an IRS official collecting a debt do not make a payment or provide them with your personal information. Scammers pose as IRS officials and use severe threats to convince victims to make immediate payment or to provider personal financial information. The IRS will not contact you by phone, email or in person for an audit or to collect back taxes. Legitimate communication from the IRS will come via postal mail. Do not respond to, open or click on any links in emails claiming to be from the IRS. If you believe you may owe back taxes you should contact the IRS directly at 800-829-1040 or the Canada Revenue Agency at 800-959-8281.

•    Be ready if you are audited. Only a small percentage of tax payers will ever face an audit, but the threat alone is enough to make many worry. Often, you will simply be asked to clarify a particular portion of your return rather than face a full audit. If you are audited, your LegalShield family plan offers audit legal services starting with your tax return due on April 15th of your first membership year. This includes an attorney at your initial audit meeting and if necessary an attorney to represent you further at the preferred member rate. If you receive notice of an audit, call your LegalShield provider law firm right away.

•    Improve the process for next year. If getting your documents together to file and figuring out deductions was difficult this year, learn from those challenges. Is there a better way to track expenses or file receipts? Figure out how to improve the process so you don’t face the same headaches next year.



Tags:  bookkeeping  identity protection  identity theft  IRS  legal competency  tax planning  tax strategy  taxes 

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Business Planning Tips For Marital Issues

Posted By Jason Trujillo, Woodbury Financial, Thursday, November 13, 2014

 Business Planning Tips For Marital Issues by Steve Parrish. Originally published on on 11/10/14. Read original article here.

I’ve reviewed a lot of buy-sell agreements over the years. The most common error I find is that they’re not agreements at all … meaning, they’ve never been signed.

When I ask why, I often get dismissive responses like, “We’re not worried about it,” or “We all agree on how it’s supposed to work.”

One way to counter this excuse, and get the buy-sell agreements executed, is to ask if any of the owners are married. Business owners quickly realize there are more interested parties in a buy-sell agreement than just the business partners.

There are also their domestic partners to consider.

Unintended business partners

A little disclaimer here. I don’t mean to disparage spouses or marriages. Did I mention I’ve been married 35 years? My point isn’t to question the institution or suggest that a business partner’s husband or wife means trouble.

It’s simply a matter of good business to address potential marital issues in business planning.

You may not know what, if any, marital issues your partners have. Still, you risk that your partner’s marriage-gone-bad can spill over into your business interests.

Ask yourself if you really want to become partners with your current partner’s divorced spouse? This exact scenario can play out if a judge awards some of your partner’s company stock as part of a divorce settlement.

Two high-profile examples

Consider two recent examples where Los Angeles-based sports teams were affected by their owner’s marital issues.

Frank and Jamie McCourt’s bitter divorce battle contributed to the takeover of the L.A. Dodgers by Major League Baseball.

When Donald Sterling, owner of the L.A. Clippers, was in serious trouble for his racist rant, a dispute quickly arose over who had the right to sell the team. Ultimately, a judge gave an extraordinary ruling to Sterling’s wife Shelly and the Sterling Family Trust to allow them to sell the team.

No business owner wants to anticipate marital problems, either personally or for one’s partners. But it is wise to do so, and to document how such issue will be handled. There are a number of best practices that are being used, some you may not have considered.

Obtain spousal acknowledgement

A recent practice has been to have spouses who not involved in the business acknowledge, in writing, their awareness of a buy-sell agreement.

Such a signed testament, usually signed at the time of the buy-sell agreement, can go a long way toward avoiding legal disputes in the future. The spouse is not necessarily disclaiming a financial interest in the equity of the business. He or she is simply declaring knowledge of the existence and terms of the buy-sell agreement.

Address competency

In a number of situations, an owner’s capacity to make legal decisions may become an issue.

For example, the judge’s declaration of Donald Sterling’s legal incapacity due to two doctors’ testimony that he suffered from dementia ultimately gave his wife the authority she needed to sell the team.

From a planning standpoint, it’s common to establish a durable power of attorney with one’s spouse to handle financial affairs if you become incompetent. These powers either become effective or continue if you are declared legally incompetent.

It can help the family function financially in trying times. All this is well and good from a personal financial planning perspective, but consider how this may affect your business interests. It would be smart to advise your business partners of any such legal arrangements you have with your spouse.

The reality is that if marital tensions develop, you and your business partner may want to review, and possibly change, these arrangements.

Legal capacity is a subjective determination, and a disgruntled spouse may be more apt to challenge competency. The risk is that a resentful spouse might, through the power of appointment, suddenly have the authority to vote shares in the business.

Define the spouse’s involvement in the business

In some situations, a spouse is involved in the business but not an actual owner. Because of the marital relationship, it can become fuzzy from a legal standpoint as to what his or her authority is to act on behalf of the business.

Is the spouse acting as an employee of the company or as a putative owner due to marriage?

To forestall this concern, document, in advance, the spouse’s scope of authority in the business. Does it include making contracts, signing checks, authorizing loans? If the marital relationship goes sour, a predetermined understanding may avoid overreaching by the spouse, and help escape additional legal disputes.

Include social media in the prenup

Traditionally, prenuptial agreements have addressed how property will be divided and distributed, and how spousal support will be determined in the event of divorce.

More recently, some couples have included social media clauses. These clauses are an attempt to avoid potentially embarrassing or defaming stories from surfacing on social media in the event of a divorce or separation.

Such clauses can be particularly useful if a closely held business interest is involved.

The business owner can use the prenup to head off humiliating or damaging aspersions that might damage the brand and reputation of the business. The agreement can be given legal teeth by providing for permission before posting or requiring a reduced settlement if the agreement is violated.

Marital relations issues are tricky and even embarrassing topics for business owners to discuss. They are, however, potentially crucial to the survival of the business. If addressed in the context of business planning, it may make it easier to manage and document. What’s love got to do with it? It’s just business.

Tags:  business owners  business planning  buy-sell agreement  company stock  divorce  Donald Sterling  Frank McCourt  Jamie McCourt  L.A. Clippers  L.A. Dodgers  legal competency  married  power of attorney  prenup  Principal Financial Group  Shelly Sterling  spousal acknowledgement  Steve Parrish 

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