Why should I incorporate my business?
Incorporating can offer your business many advantages. A corporation is a legal entity created separately from those who own and operate it. As a separate entity, the corporation’s debts and taxes are separate from its owners, thereby offering the greatest personal liability protection of all business structures. Every business owner needs to protect their personal and business assets from litigation. Billions of dollars are awarded every year in business related lawsuits. In addition to liability protection, incorporating offers tremendous estate planning advantages because it continues to exist even after the death of a shareholder.
What is a corporation?
A corporation is a legal entity created separately from those who own and operate it. As a separate entity, the corporation’s debts and taxes are separate from its owners, thereby offering the greatest personal liability protection of all business structure. Corporations also offer tax savings and the ability to raise capital under your business name. Corporations can vary in formation and organization. The two most common types of corporations are S and C corporations. We will assist you in choosing which type of corporation is right for you and helping to complete the appropriate paperwork for your filing.
What is an LLC?
A Limited Liability Company or LLC, blends the aspects of corporations, partnerships and sole proprietorships into a simple and flexible business entity. LLCs can be used to hold property and transact any type of business. They protect the owners and operators from personal liability similar to a corporation, and they possess the “pass-through” tax benefits of a partnership. Additionally, LLCs offer the same personal liability protection as corporations, but do not require the typical formalities that are required when managing a corporation.
Why Should You Incorporate Your Business?
Incorporating is the most powerful thing you can do to legitimize your business affairs. By incorporating, you are separating your business assets from your personal assets to prevent your savings, home, retirement and other personal assets from being targeted by a lawsuit against your business.
Incorporating builds tax flexibility, credibility and name protection as well as opening the door to tremendous advantages.
Its Really expensive when you miss your IBR or PAYE certification date.?
Unexpected costs are everywhere with student loans. Interest grows on your loans every days and one mistake on payments and you get hit with late fees.
One mistake that can cost thousands of dollars comes with Income Based Repayment (IBR) or Pay As You Earn (PAYE) re-certifications. You read that correctly. Screwing up your IBR or PAYE re-certification can cost thousands of dollars.
How does this happen?
When you are on IBR or PAYE, it is possible that the monthly interest on your student loans is greater than your actual payment. If this is happening, it means your balance is growing rather than shrinking with each payment. While this situation is clearly far from ideal, it is a way that many borrowers tread water until they get a better paying job, or ultimately qualify for student loan forgiveness.
For borrowers in this situation, re-certifiying in a timely manner each year is critical. The reason is capitalization of interest. When your interest is capitalized, it means that it is added to your principal balance and that you start paying interest on that interest.
Typically, on PAYE or IBR, interest is not capitalized as long as you are on the program. However, failing to re-certify your income on time gets you kicked out of the program. The instant you are kicked out, your interest is capitalized. Even if you do eventually re-certify, that interest is added to your principal balance, and there is nothing that can be done about it.