June 29, 2005
Estate Taxes - It Pays to Plan Ahead
Estate taxes. It's not enough to simply know they exist, and to know strategies to minimize them. When it comes down to it, you need to plan how you and your family will eventually pay them.
The Estate Tax Dilemma
Estate taxes are generally due nine months after the date of death. And they are due in cash. In addition to estate taxes, there may be final expenses, probate costs, administrative fees, and a variety of other costs. How can you be sure the money will be there when it's needed?
Estate Tax Options
There are four main sources of funds to pay estate taxes. First, your current savings and investments. You or your survivors can use savings and investments to cover the costs of estate taxes, probate fees, and other expenses. This is often a sound alternative. However, sometimes savings and investments may not be sufficient. And if those savings were earmarked for other financial goals, you may need to rethink how you will achieve those goals.
Another option would be to borrow the money. Unfortunately, with this option you not only have to pay the estate taxes, but you or your survivors will be forced to pay interest on the amount borrowed to pay estate taxes. Remember to consider how your family's credit standing will be affected by a death in the family.
Continue reading "Estate Taxes - It Pays to Plan Ahead"June 22, 2005
How to Evaluate and Raise Your Credit Score
Why do some people get offers for pre-approved credit cards and others don't? What do car dealers know about your financial health that you don't know? The answer is your credit score.
Your credit score is a number generated by a mathematical formula to estimate how likely you are to pay your bills. Based on the information in your credit reports from the three credit bureaus, Equifax, Experian, and TransUnion, your credit score has been a factor in your ability to qualify for loans and good interest rates for more than twenty years. Lenders compare your credit report with millions of others to determine your score.
While there are a variety of credit scoring methods available to lenders, the most widely used is the FICO score. Based on a scoring system developed by Fair, Isaac and Co., FICO scores range from approximately 300 to 800 points and are provided to lenders by the three credit bureaus. You also have access to your FICO scores but will be charged a fee by each credit agency providing your report.
According to Fair Isaac, the credit scores of the American public are divided as follows:
- 499 and below 1 percent
- 500-549 5 percent
- 550-599 7 percent
- 600-649 11 percent
- 650-699 16 percent
- 700-749 20 percent
- 749-799 29 percent
- 800 and above 11 percent
June 21, 2005
Look Out for that Great Accountant
There are many factors to be considered when you are trying to select the accountant who is right for you. In other words how to find that good one. Better still, how to find that "great one".
Make up a shortlist of at least 4 or 5 potential candidates. Compare what each has to offer. Come to a conclusion as to which offers the best service for the cost involved. You must find out about each accountant.
See if they are interested in your type of business. Are they keen on the size of your business and the work involved? Do they only work for the "biggies" or can they help you in your small operation.
If they don't appear interested in you, don't waste your time - keep looking.
Some of the questions that you will need to ask yourself include the following:
Does the accountant understand the type of business you operate?
Has the accountant had experience in your type of business with other clients?