9 Jun
8 Jun

Proper Accounting of Business Loans Will Help Save Time and Money Down the Road

As new businesses are starting out, it can be difficult to establish a steady cash flow to cover expenses. Business owners often want to “lend” their business money here and there to make sure the company stays operational. In many cases, where the business only has one member or owner, these loans go undocumented and no interest is paid when the principal is paid back.

Once you decide to use your personal funds to invest in your business, you’ll need to work with your accountant to determine if the money should be treated as equity or as a loan to the business. Either way, the transfer of funds between owner and business should be well documented in the company’s accounting records.

An equity investment, commonly referred to as a capital contribution, is when the owner transfers money into the business only for an increase in the owner’s equity. This is not a taxable event and the money is not expected to be repaid. However, the contribution date and amount still needs to be documented in writing to adjust the owner’s equity in the company.

On the other hand, a loan is a transfer of money to the company that is expected to be repaid with interest over a period of time. The loan should be documented with a written promissory note identifying the amount of principal, interest rate, and time period. Interest paid by the business will be documented as a deductible business expense on the business tax return. Similarly, the owner will document the interest income on his or her tax return.

It is important to remember that transferring other personal assets to the business besides cash should also be documented in the same way. You need to decide whether property and assets used in the business are contributions or leases to the business and record the transaction accordingly.

Before simply transferring a few thousand dollars (or more!) over to your business checking account, work with your accountant and attorney to decide on the best structure for the transfer and the appropriate paperwork needed. Taking this simple step can save time and money later when these transactions may be called into question.

 

Death with Dignity – How You Can Incorporate a “Graceful Departure” in Your Estate Plan

The D.C. Council is debating legislation that would allow doctors to prescribe lethal doses of prescription medication to terminally ill patients. The “Death with Dignity Act,” introduced by Council member Mary Cheh made it out of a five-member committee by a 3-2 vote.

Council member Cheh introduced the bill to give “dying patients greater choice and control over their final moments,” according to the Washington Times.

“In the face of imminent death, meeting a patient’s individual needs and wishes compassionately should be our top priority. If a dying person wishes to peacefully end his or her life rather than endure prolonged pain and suffering, we should not stand in their way,” said Council member Cheh.

Here is an ABC News report discussing the proposed legislation:

No matter where you stand on the issue of assisting a patient with ending their life, it is important to know that there are many ways to prepare if you become terminally ill. For example, you (or preferably your estate planning attorney) can put together an Advance Directive.

This directive allows you to name a healthcare agent to act on your behalf when you are unable to communicate with your doctor, and can contain instructions for your preferences on medical treatment.

For example, if a medical professional determines you are going to be in a persistent vegetative state, you can include directives to your health care agent and what type of treatment, if any, you prefer.

If you choose to refuse treatment in certain circumstances, this directive generally controls and should be respected by your family and medical professionals. The directive keeps the proverbial ball in your court. Along with your Advance Directive, it is essential you discuss your personal beliefs with the person you decide will take on the responsibility as your health care agent so they can carry out your wishes and allow you to, hopefully, pass on gracefully.

When you become a client of InSight Law, you will receive a Maintenance Plan affording access to Docubank. This is a great service giving you immediate access to your healthcare directives and emergency medical information anywhere at any time, 24/7. This is helpful because not everyone receives an official diagnosis of a terminal illness and is given time to contemplate how they want to pass on. In many instances, for example getting into a serious car accident where you are left permanently incapacitated, means you need to have your Advance Directive in order and accessible by our health care agent. As an InSight Law client, you will receive a Docubank card to keep in your wallet or purse. This card gives your medical provider the essential information they need to contact Docubank and obtain a copy of your Medical Directives and instructions you completed.

Additionally, it is important to revisit your Directive every couple years to ensure your preferences have not changed and it is current with the laws (for example, the Death with Dignity Act may have passed in your state).

Obviously, we all want to remain healthy and live long, productive lives. Nevertheless, you need to prepare for the possibility that life may throw a curve ball. Do not force your family and loved ones to guess what you would have wanted. Have a plan in place.

Death with Dignity – How You Can Incorporate a “Graceful Departure” in Your Estate Plan

The D.C. Council is debating legislation that would allow doctors to prescribe lethal doses of prescription medication to terminally ill patients. The “Death with Dignity Act,” introduced by Council member Mary Cheh made it out of a five-member committee by a 3-2 vote.

Council member Cheh introduced the bill to give “dying patients greater choice and control over their final moments,” according to the Washington Times.

“In the face of imminent death, meeting a patient’s individual needs and wishes compassionately should be our top priority. If a dying person wishes to peacefully end his or her life rather than endure prolonged pain and suffering, we should not stand in their way,” said Council member Cheh.

Here is an ABC News report discussing the proposed legislation:

No matter where you stand on the issue of assisting a patient with ending their life, it is important to know that there are many ways to prepare if you become terminally ill. For example, you (or preferably your estate planning attorney) can put together an Advance Directive.

This directive allows you to name a healthcare agent to act on your behalf when you are unable to communicate with your doctor, and can contain instructions for your preferences on medical treatment.

For example, if a medical professional determines you are going to be in a persistent vegetative state, you can include directives to your health care agent and what type of treatment, if any, you prefer.

If you choose to refuse treatment in certain circumstances, this directive generally controls and should be respected by your family and medical professionals. The directive keeps the proverbial ball in your court. Along with your Advance Directive, it is essential you discuss your personal beliefs with the person you decide will take on the responsibility as your health care agent so they can carry out your wishes and allow you to, hopefully, pass on gracefully.

When you become a client of InSight Law, you will receive a Maintenance Plan affording access to Docubank. This is a great service giving you immediate access to your healthcare directives and emergency medical information anywhere at any time, 24/7. This is helpful because not everyone receives an official diagnosis of a terminal illness and is given time to contemplate how they want to pass on. In many instances, for example getting into a serious car accident where you are left permanently incapacitated, means you need to have your Advance Directive in order and accessible by our health care agent. As an InSight Law client, you will receive a Docubank card to keep in your wallet or purse. This card gives your medical provider the essential information they need to contact Docubank and obtain a copy of your Medical Directives and instructions you completed.

Additionally, it is important to revisit your Directive every couple years to ensure your preferences have not changed and it is current with the laws (for example, the Death with Dignity Act may have passed in your state).

Obviously, we all want to remain healthy and live long, productive lives. Nevertheless, you need to prepare for the possibility that life may throw a curve ball. Do not force your family and loved ones to guess what you would have wanted. Have a plan in place.