Business Best Practices

Money worries distract workers. Employees who are stressed out about their finances generally have trouble focusing on work and don’t give it their best effort, resulting in a loss of productivity. Moreover, employees who are living from paycheck to paycheck are unlikely to direct money to a workplace retirement plan and, if they do contribute, they tend to contribute small sums. Financially stressed employees are also more likely to leave their jobs, taking their skills with them and putting pressure on their former employers to hire replacements.

Inflation, debt, a lack of emergency savings, and minimal or no retirement savings are some of the factors contributing to the high levels of financial stress among American workers that can affect the companies they work for. Very often, personal financial issues are compounded by a lack of knowledge of basic commonsense money management skills. One way employers can help employees gain more control over their financial lives is by providing them with access to educational programs focused on financial wellness.

What Is Financial Wellness?

When it comes to their finances, employees have different priorities and obligations. But in broad terms, employees who are financially well make sound financial decisions, manage their money wisely, and have a clear, workable plan for saving for their short- and long-term goals. Since they are no longer under extreme financial stress, they can also focus more on fully engaging at work and in other parts of their lives.

An effective financial wellness program should focus on imparting the knowledge and skills that help individuals overcome personal financial challenges. Employers should consider the following topics and strategies:

• Budgeting. Learning how to budget and set spending priorities is an invaluable skill that can help individuals get a handle on their financial lives. Employers could direct employees to online tools that help with budgeting and offer suggestions on how to not overspend.
• Debt management. Online seminars, videos, and written materials that explain the terms and conditions of consumer debt and how to comparison shop among credit card issuers can help prevent employees from making expensive errors and falling deeper into debt. There are also tools that allow users to develop a strategy for paying off credit cards and other debts that limit their ability to save for the future.
• Saving for current and future goals. Offering materials that teach employees how to establish and prioritize financial goals, such as building an emergency fund, buying a first home, financing a child’s college education, and saving for retirement, can be hugely helpful in putting employees on the road to financial wellness.
• Investing education. Covering a variety of investment-related topics — including asset allocation, diversification, risk and reward, volatility, and rebalancing — can help retirement plan participants make sound decisions about managing their plan assets. Online tools, seminars, and handouts that explain these topics in easy-to-understand language give employees the skills they need to make the most of their opportunity to attain retirement security.

Your financial professional can offer helpful insights on smart ways to help your employees take control of their finances and improve their financial health.

For more information on Financial Wellness Programs, call Vista Tax Relief at 480-916-2862 today!

Like most business owners, you have probably invested a lot of energy into growing your business. And like other business owners, you probably hope to exit your business at some point in the future with enough money to ensure your financial security. When the time comes to sell your business, you’ll have to determine its fair market value (FMV) to ensure you’ll receive a fair price. Since it is a difficult undertaking to assess fair market value, the assistance of an appraiser who specializes in business valuations is crucial.

Different Approaches

Business valuation professionals will typically use a variety of approaches to determine the value of a business.

An asset-based approach basically looks at a company’s balance sheet. If the valuation is based on a going concern, the company’s assets (net of depreciation) are listed and its liabilities are then subtracted. Generally, the resulting “book value” is adjusted to reflect the current market value of the company’s assets.

Earnings-based approaches assume that a business’s true value lies in its future wealth-producing abilities. One common approach involves capitalizing past earnings using a rate of return that a reasonable buyer would expect on the investment.

Market-based approaches attempt to establish the value of a business by comparing it to similar businesses that have recently sold. This approach works well for most businesses except sole proprietorships, since finding public information on prior sales of like businesses is difficult.

IRS Approach to Valuing a Business

It also may be helpful to look at the factors the IRS considers when determining the value of a business for tax resolution purposes. The IRS typically weighs the following factors when attempting to compute the fair value of a business:

• The nature of the business and the history of the company
• The future prospects of the economy at large and the business’s industry in particular
• Book value and overall financial health
• Earning capacity of the company
• Dividend-paying capacity
• Goodwill or other intangible value
• Sales of the stock and the size of the block of stock to be valued,/p>
• The market price of stocks of corporations engaged in the same or a similar line of business.

Timing of the Valuation Is Important

As a business owner, it makes sense to have your business valued long before you intend to sell it. Why? If it transpires that your business’s valuation is lower than you assumed, you will have sufficient time to implement various changes in your business that can drive up its value.

For more information on Business Valuation, call Vista Tax Relief at 480-916-2862 today!

When you owe taxes to the IRS and cannot pay the full amount immediately, an installment agreement can help you break down your tax debt into manageable payments over time. This guide will explain what an installment agreement is, who qualifies, and how to set it up with the IRS.

What Is an Installment Agreement?

An IRS installment agreement is a payment plan that allows taxpayers to pay their tax debt in monthly installments rather than in a single lump sum. This can help alleviate the burden of a large tax bill while ensuring compliance with IRS payment requirements. It’s important to note that while an installment agreement allows you to pay over time, interest and penalties will continue to accrue until the debt is fully paid.

Types of Installment Agreements

There are several types of installment agreements available, depending on the amount you owe and your financial situation:

1. Short-Term Payment Plan: If you can pay the full amount within 180 days, you may qualify for a short-term payment plan. No setup fee is required, but interest and penalties will still apply.
2. Long-Term Payment Plan (Installment Agreement): If you need more time (typically more than 180 days), the IRS offers long-term payment plans. These require a setup fee but allow you to pay off your debt over several years.
3. Guaranteed Installment Agreement: Available for taxpayers who owe less than $10,000 and can pay off the balance within three years.
4. Streamlined Installment Agreement: Available for those who owe $50,000 or less. No financial statement is required, and you can pay off the balance within 72 months.

Step-by-Step Guide to Setting Up an Installment Agreement

Step 1: Determine If You Qualify

Before applying for an installment agreement, check whether you meet the IRS requirements:

• You must have filed all required tax returns.
• You owe less than $50,000 in tax, penalties, and interest (for streamlined agreements).
• You can pay off the balance within the time frame set by the IRS (typically six years).

If you owe more than $50,000, you may need to submit additional financial information to the IRS.

Step 2: Gather Necessary Information

Before applying for an installment agreement, make sure you have the following information on hand:

• Social Security Number (SSN) or Employer Identification Number (EIN)
• Your most recent tax returns
• The total amount you owe, including penalties and interest
• Your desired monthly payment amount based on your budget

Step 3: Apply Online or by Mail

You can apply for an IRS installment agreement through one of the following methods:

• Online Payment Agreement (OPA): This is the fastest and most convenient way to apply. Visit the IRS website at irs.gov/opa to submit your application online. You will need to create an account if you don’t have one already.
• Form 9465 (Installment Agreement Request): If you prefer to apply by mail, fill out Form 9465 and send it to the IRS. This form allows you to request a monthly payment plan and specify your payment amount.

Step 4: Pay the Setup Fee

The IRS charges a fee to set up long-term installment agreements. As of 2024, the fees are as follows:

• $31 if you apply online and set up direct debit payments (automatic withdrawal)
• $130 if you apply online without direct debit
• $225 if you apply by mail or phone without direct debit
• Fee waivers: Low-income taxpayers may qualify for a reduced fee or a fee waiver. Check IRS guidelines for eligibility.

Step 5: Make Your Payments

Once your installment agreement is approved, you must make your payments on time each month. You can choose from several payment methods:

• Direct debit (highly recommended): Payments are automatically withdrawn from your bank account each month, which reduces the risk of missing a payment.
• Check or money order: You can send payments by mail, but this method increases the risk of late or missed payments.
• Online payments: Use the IRS Direct Pay system or your IRS online account to make payments electronically.

Step 6: Stay Compliant

While on an installment agreement, it’s crucial to stay compliant with all IRS requirements:

• File all future tax returns on time.
• Pay all future taxes owed on time.
• Make your installment payments as agreed.

If you fail to meet these obligations, the IRS may cancel your agreement, and you could face additional penalties or enforcement actions, such as wage garnishment or bank levies.

Benefits of an Installment Agreement

• Avoid Collection Actions: Once your installment agreement is approved, the IRS will generally stop collection actions, such as wage garnishment, tax levies, or liens.
• Flexible Payments: You can choose a monthly payment amount that fits your budget (subject to IRS approval).
• Prevent Further Penalties: Although interest and penalties will still accrue, setting up an installment agreement can prevent additional penalties for failure to pay.

Conclusion

Setting up an installment agreement with the IRS can provide much-needed relief if you’re unable to pay your tax debt in full. By following the steps outlined above, you can avoid aggressive collection actions and pay off your debt in manageable monthly payments. Always remember to stay compliant with IRS requirements during the installment period to avoid any interruptions to your payment plan.

If you are unsure about your options or need assistance, consider consulting a tax professional who can guide you through the process and ensure that your installment agreement is properly set up.