HSA Bank Accounts – The Basics

An HSA bank account, more commonly known as a health savings account, is used along with an HSA-compatible high deductible health plan. Used properly, it can be one of the best ways you can spend health insurance dollars.

How Can You Save Money with an HSA?

Most traditional health insurance plans can cost you literally thousands of dollars every year in premiums. If you are healthy, you won’t get a lot of benefit from paying for this type of plan, because the premiums are going to cost you more than what you would normally need to spend in health-related expenses. However, a high deductible health plan and an HSA bank account, used together, can be a great way to use higher deductibles to gain lower premiums. But often times, even after the trade off of facing those higher deductibles, overall expenses are usually lower if you have a healthy year. You will have to handle more out-of-pocket expenses up front, though, for the services you do use.

Remember What Insurance is Really For

If you have an accident, will you have the money is available to pay for it? What if you become sick and require extensive, costly medical care? The HSA bank account and the HSA-compatible health plan, used together, can help you avoid financial catastrophe if you face this type of situation, because once you’ve met your deductible, your insurance company will take over paying your medical bills. Therefore, if you’re healthy and generally just need regular doctor’s appointments and some prescription medications, that means you pay your bills. But if you really get sick, you won’t face tremendous financial risk because the insurance company will take care of any expenses beyond your deductible — and for many of us, isn’t that what insurance is really for? To protect us from the really catastrophic events?. What’s best about this is that if you are particularly healthy one year, and you don’t use the money in your HSA, it’ll simply be carried over into the next year, and it will remain tax-free as long as you only use it on qualified health expenses.

How to Set Up and Use an HSA

Once you enroll in an HSA-compatible high deductible health plan, you can set up an HSA bank account. Most major banks will let you do this, or you can choose to use the bank recommended by your health insurance plan. Once you set things up, you’ll usually get a debit card and checks just as you would if you were setting up a normal account. The difference is, of course, you only spend the money on qualifying medical expenses, many of which will count toward satisfying your health insurance deductible. If you do have health expenses that don’t qualify as part of your deductible, you can still use the money from the account with no worries.

Many people will find that they need dental work or eye care, but these are services that regular insurance policies usually don’t cover. However, you can use the monies from your HSA to cover them, all tax-free. Again, though, any unqualified expenses that can be covered by funds from your HSA will not go toward your detectable amount.

HSAs can seem complicated at first, but they can also be a great and very inexpensive way to control health care costs for many people willing to take the time to understand them.


Ways to Find Cheap Auto Insurance Online

Searching for the cheapest car insurance company can be like looking for a fine needle in a haystack. It is there, but it isn’t necessarily recognizable or instantly available to you. If this is your problem, you might not be looking for cheap auto insurance online in the right places. If you have been trying to find the lowest rates on your own and haven’t been in luck, you might want to use a brokerage firm. They can often provide the best rates for your needs all in one place.

The way you go about finding car insurance has a lot to do with your personality and what you know about the field of insurance. It sometimes depends on who you know and who you have helping you. One of the things you need to be aware of is the initial premium price isn’t necessarily the final one. Many times you need to go back to the insurance company and ask for discounts, because they won’t necessarily know everything about your driving record or your family. Sometimes your premium rates will go down if you combine other insurances into one bill. Some companies will offer more than one kind of insurance, allowing you to lower premiums on health, car, life, home, etc. This is an option that is available, but it doesn’t always have to be used.

Some places will offer discounts for a good driving record or if your cars are all under a certain age. Maybe they provide discounts to students who keep their grades up or if you have never been in an accident. There are a lot of different things to ask when looking for cheap auto insurance online. This means never take the initial price for reality, as it could greatly differ by the end.


5 Simple Ways to Improve Your Marketing and Boost Your Business Profits


Marketing is the cornerstone of successful business. Without marketing there are no customers, and therefore, no business. In my work I come across many small businesses. Usually, when the owners are asked about their own marketing efforts, the simple reply is they are too busy to devote time to it and anyway, as they are so busy, they do not need to do any marketing anyway!

This attitude highlights the one simple truth that stifles any possible growth in a small business, the owner of the business IS the business.

What I mean by this is that if the proprietor is on holiday, off sick or even dies, the business immediately stops. No one else is around to pick up the threads and carry on. Spouses that are left have no idea what work is currently being done, coming up to be done, or even overdue. No knowledge of problems lurking in the background, or of the financial position of the business. In fact, everything was being carried in the head of the proprietor who fully intended to make some notes when he was not so busy, and had promised himself he was going to write up the last month of books and records next weekend.

Most people start their business because they are good at their job and want to work for themselves rather than feather the nest of their employer. Once they have their own business up and running, they find they have replaced their former 9 to 5 job with a 20 hour a day business producing far less income than they were used to.

Can you identify yourself with this picture?

If so, here are 5 steps you can take to regain control of your business, improve your marketing efforts and boost your profits.

Step 1: Start To Work On Your Business Instead Of In Your Business

What has this to do with marketing and boosting profits I hear you ask?

Immediately resolve to step outside your business. What I mean by this is for you to go out and employ a person, maybe two or even three, to do the jobs that you have been so wrapped up in that you have been chasing round in ever decreasing circles. Remember the song Busy doing nothing, nothing the whole day long, spending lots of time finding things not to do? When did you last feel that you had achieved a really valuable, and profitable, days work?

Do not worry, you are not alone! Most small businesses are in this position. The original good idea that sparked the formation of your enterprise was a similar incentive to most other people starting their businesses. But the reality is that the person having the good idea is mostly not skilled at the vast collection of things that need doing to bring that idea to life. For example, the small business owner has to be salesman, telephone operator, bookkeeper, credit-controller, invoicing clerk, progress chaser, VAT specialist, copy writer, supplies buyer, contract expert as well as dealing with many other things they never even thought of when that idea struck and the business began.

What would you do if you now had a couple of employees doing the basic work of the business? I asked a small business owner this very question recently and the immediate response was Starve!! When I asked what he meant by that I was told that he could not possibly afford to pay any salary and still have enough money to buy food for him!

I could see the way this chap was thinking and he is not alone. He thought that he could not possibly pay any salary from his profits and still make a living for himself. After all, his finances are tight enough already.

Once I explained that this mindset was only valid if he simply sat on his hands after employing his assistants and did nothing with the free hours he now found himself with. That was a revelation to him. The very idea of having time to step back a little, to reflect, plan and think about his business was a pleasant surprise.

Now, let me ask you a direct question…What would you do with 30 to 40 hours a week that had suddenly become free time?

Would you consider using a little of that time to maybe grow your business? Do you think you could use the time to channel the passion you felt when you were just starting out into continually chasing customers as you did in the early days until you became too busy?

This is the most important step you can make for your business, ever.

I know the thought is scary. The very idea of trusting your baby to new assistants that do not have all your skills, energy and the same passion for your business…is a difficult concept to grasp.

I will address how to overcome this psychological barrier in another report but in essence it is simple. It is just a matter of advertising for the right staff.

Once you have made the decision to separate yourself from the day to day details of your business some magical things begin to happen…

Step 2: Customer Focus

Is the emphasis of your advertising, website, brochures, email newsletters etc. all about you and your business/product?

Is your company name featured heavily at the top of your letterheads, website, email newsletters, advertisements etc.?

If it is, I can tell you this is the biggest turnoff for new customers ever invented. I know it sounds harsh but do you think prospective customers want to know about the years of development, the trials and tribulations you have conquered, the merger of two businesses in 2001 to create the current firm, your qualifications and experience?

No, they do not!

This is a hard fact for small businesses to understand. They spend lots of time and unnecessary amounts of money making a smart brochure, stationery set, website etc., and wonder why the orders do not flood in when the image looks so polished and professional.

All your prospective customers are interested in is what they get out of what you offer. By this I mean if you are selling to the public, they want to know how your product will make them feel, how it will improve their lives, save them money etc. If you sell to other businesses, what do you think they are interested in? Well, what are you interested in? Will this product make you £50,000 in extra profits, save two employees off the payroll, increase productivity, etc….. The best test is to apply your own thoughts about buying to your selling literature. What would you like to see if someone was selling it to you?

It is sometimes a shock for people to look at their whole company image and ethos and realize that they would be put off buying if they were a prospective customer being approached by a firm like that.

Can you start now to see the power in changing your approach from being self orientated to solely and exclusively customer orientated?

Ask a good friend if they would buy from your company after looking at your literature?

Step 3: Make Your Advertising Work For You

Sounds obvious but if you look around you, are other businesses making it work for them?

Let me illustrate this idea with an example. You want a new bathroom and are really excited at the prospect of how your new bathroom will enhance your life, impress your friends and family, and be a source of pleasure for many years to come. Where do you look first for a bathroom company? In the local paper, yellow pages, a card on an advertising board at the supermarket? If you see an advert just it just give the business name address and phone number and mentions the fact that they are plumbers that can also fit bathrooms? Does it inspire you to contact them? It is unlikely but if you are new to the area and have no one to ask for a recommendation, what choice do you have?

Would you rather see something that matches the image you have in your head of your new bathroom? An advert that tells you how your new bathroom will be designed around you, how the colour and choice of fittings will enhance the overall appearance, how the lighting can make such a difference to the look and feel of the room at night, how the range of tiles offered are chosen to perfectly compliment the fittings?

Which business would you contact first? The advert that just gives basic details or one that gives enough hints for you to know that they really care about their customers, and that they put their customers at the very top of their businesses priorities.

I know this is an extremely simple explanation but it does highlight the negative way 99% of businesses represent themselves in their own adverts.

Another example is to look in your local Yellow Pages for an Accountant. In my local edition there are 11 pages of entries for Accountants. All but one of them have their company name in big letters and a list of bullet points of the services they offer such as Accounts Preparation, Self Assessment Returns, Tax Planning and Advice, Consultancy and Support. How do these Accountants think you are able to pick their firm out of all those adverts, select them as your new Accountant, and acquire a new customer?

The one that I mentioned which has not done that shall remain nameless, but I can guarantee you that their Yellow Page advert is well worth the money they have spent. After all, what is the point of paying for an advert that just lists things that an Accountant is expected to know and offer anyway?

To make your advertising work you have to abandon the accepted way of doing things. Do not fall into the institutional way of advertising like all those Accountants.

Aim to be the only one who actively writes the advert to appeal to potential customers, to match the things they are looking for that makes you unique and worthy of their business.

Out of 11 pages of Accountants, would you sigh and just pick one that is close to your address, or if you saw one that offered you a free report that showed 5 simple ways to improve your marketing and boost your business profits; that mentioned other reports informing you of all matters directly relevant to your business; and that gave you the impression that you will be the most important person in their practice; would you choose them? Or at least ring them and have a chat?

Think of these pointers relating to your own business and make sure that your advertising works for you.

Lastly, do not be put off by pushy salesmen trying to sell you advertising. I have had it myself from that wonderful tome, Yellow Pages, telling you that everyone advertises institutionally because it works. It is simply because they are looking for a quick commission and do not want to be delayed by irrelevant matters such as artwork or design if they can help it.

Step 4: Test Everything You Do

This means just what it says on the tin. Test everything you do to make sure it works; that it creates the desired response; that it cannot be done in better ways; that it looks at its best etc.

Never roll out a series of adverts or sales letters without testing. Simple changes to headlines, colours, size, content etc. can have a marked effect on results. Take out small adverts in different places and see which produces better results. Use a system of codes to make tracking the responses easier. Continually tweak and fiddle with them until you find a small advert that produces a good stream of responses each time you put it in. Then you can be confident that a larger advert, which costs more money, will produce even better results. This is how advertising should operate. If your current adverts are not performing as well as you would like, change them or get rid of them. Each advert should make you more profit else why would you bother?

The reason you test everything is so you can judge the results objectively. A successful advert is one that makes a profit each time you run it so you must keep an eye on responses from each advert with a code or similar method. If you find a profitable advert, run it more often and in more places. Keep checking its performance and use it more and more whilst it is profitable. Dump it as soon as its performance starts to drop off.

Step 5: Take Control Of Your Business

Remember, it is your business and you decide how it is structured, how it operates, where it runs from, how it is to grow and how it should be serving you.

If you have taken notice of Step 1 above, you should have climbed out of the trenches of your business. You should have stopped being a foot soldier and be acting as a general, directing your troops as they tackle the world of business to make profits for you.

Now is the time to decide on your working hours, what you really want out of life and how much wealth you want to create for yourself.

Most business owners are scared of stepping back from their business but the moment they do, the potential for growth opens up in front of them.

Once you are remote from your business you can start to make decisions about the future. For a start, everyone in the business should become an expert at marketing. Your customer experience of your business starts with the first contact or telephone call. Every member of staff must therefore be customer focused and looking to give that customer the very best experience possible.

Have you ever been to a shop at 5.20pm that is supposed to close at 5.30pm, thinking you have time to pop in before they shut, only to find someone stood at the door refusing to let you in as they are closing. You can see the way those staff are focused; inwards upon themselves. They want to be leaving at 5.30pm and be on their way home. They do not care if their boss loses a sale, they just want to watch today’s episode of their favourite TV Soap Opera.

A successful business will have staff more than happy to welcome you with a smile at 5.20pm and stay with you until you are sorted, even if it means they get home late themselves.


There are many ways to educate yourself and your staff in marketing and customer services but it is time and money very well spent. Just telling your staff to say Have A Nice Day as each customer leaves your premises loses all its benefit if they say it snarling through gritted teeth!

Ray Stewart ICPA FCCA


Real Estate Tax Strategies And Forming An LLC

The 1st step in doing any real estate investments is to start a business. There are different types of business entities: sole proprietorship, Limited Liability Company (LLC), Series LLC (only in certain states), Limited Liability Partnership (LLP), LLLP, S-Corp, C-Corp. Series LLC can be set up in following states: Delaware, Iowa, Oklahome, Tennesee, Utah, Wisconsin.

Each of them has its advantages and disadvantages. The only true flow through taxation entity and the most beneficial in terms of holding real estate is Limited Liability Company. Limited Liability Company allows you to pay for business related expenses with pre-tax dollars. It is very important to understand that when you get paid and receive your paycheck, your taxes are already deducted and all your expenses whether they are real estate or business related are deducted on AFTER-TAX basis. When you have an LLC, you take all business expenses, deduct them, and pay income tax on what is left over. LLC does not require records and minutes of meetings. Filing paperwork is limited to articles of organization that lists LLC members. Tax Advantages: LLC is a pass through entity and if it is a single member the entity is considered disregarded by IRS. A corporation is subject to double taxation where not only the profits are taxes but also distribution in the form of dividends are taxed as well. The other advantage is flexibility in terms of LLC ownership transfer. LLC ownership is guided by Operating Agreement, which is an internal document. In order to change ownership all that needs to be done is the Operating Agreement and no filings are required besides updates with IRS for given tax ID number. LLC is the only entity that is NOT subject to loss limitation! It also has less filings than an S-Corp and very easy to maintain. If you have multiple properties, have them each in LLC and have one LLC to be your holding company that would own all the other LLCs. For tax purposes your main holding LLC will be a sole member LLC for the other ones and you will need to file only one tax return. In addition to the tax benefits LLC also allows you to have a basic level of asset protection. If your business owns the assets, they are separated from your personal assets and in case of a law suit they can not be touched. Please, note that LLC is a BASIC level of asset protection and if the opposing party has a good attorney there are many ways how your personal assets can become a part of a law suit. It is called piercing corporate veil. For example, you are required to have a separate bank account for an LLC. If your LLC owns your property, then all property relates income and expenses have to come out of that particular bank account. If this is not done, the LLC status can be disqualified and your personal assets become part of the lawsuit. Your LLC must be in good standing with the state and your must have adequate information on your article of organization. The purpose of the business must be clearly stated with no exclusions and you must file amendments when necessary. If you buy real estate, you should say that you buy, hold, rent or lease residential real estate; if you sell, you must state that you buy for the purpose of resale for profit, etc. In some states it is necessary to publish LLC in a local newspaper, and it can get very expensive; in other states like Maryland you need to pay annual fee, which is currently $300 a year. You need to check on your state requirements and guidelines and always be in good standing with the state.

Primary Residence. If you have an LLC, you might need an office and conveniently enough it could be in your personal residence. According to IRS Code 288G, you are allowed to deduct rent payments for your office space in your personal residence.

Depreciation. It is the most beneficial deduction in real estate! While your real estate is appreciating, you are allowed to depreciate it over the life of the building, which is 27.5 years and take the deduction against your income. However, depreciation is allowed only against the building, land can not be depreciated. For example, if you own a house thats worth 100,000, the value of the building might be only $80,000 and the value of the land is $20,000. Thus, you are allowed to take depreciation expense against the value of the building only.

Accelerated Depreciation. You might have heard from your accountant that accelerated depreciation is not allowed against real estate, and it is true, but there is a way to make improvements deducted in prior years and it all depends on how they are classified. For example land improvements such as curbs, sidewalk, and landscaping are depreciated over 15 years; personal property is depreciated over 5 years. Items that are considered personal property according to IRS code 1.48-1(c) must have one of the following features 1. accessory 2. function 3. movability. Basically everything that is an accessory, functions or movable is real property. If you are doing a rehab and can install movable walls, you can deduct the cost of improvements over 5 years. If they are not movable, then you will have to take 5-6 times less deduction for improvements in the next 5 years. Make everything you can either function, be an accessory or make it movable! One commercial developer built his office building with light weight movable walls and was able to deduct $80,000 that same year.

DEALER status. When flipping properties it is important to avoid “DEALER” status. In some case it can be avoided by flipping properties through different entities, in some cases by doing a few transactions, but the easiest “investor friendly” way is to simply state your INVESTMENT INTENT. If you state that your investment intent is buy, hold, lease, and rent properties unless forced to sell under certain conditions like need for working capital, you can get away with not being considered a DEALER.

IRS Red Flags. There are also certain things you should not do that would raise red flags to IRS and you might get audited. First, do not report too much rental income loss, there are plenty of expenses you can find to reduce your pre-tax income. Second, do not over complicate your asset protection structure. Having too many business entities on top of each other, or having domicile headquarters in Las Vegas, NV, tax free state could be a red flag. Reporting losses for more than 2 years always raises red flags. The common sense behind it: “if you do not make money why are you still doing business?”. Reporting excessive donations, high expenses vs high income can also cause an audit.

Property Taxes. Real Estate Investors are subject to a number of taxes including property taxes. Assessed value and market value of the property always have a gap. In 2007 assessed value was normally lower and in 2010 it is 99% of the time higher than market value of real estate. The taxes are not always reassessed depending on the market cycle and it is your responsibility to dispute them. In state of Maryland it is allowed to dispute personal property taxes within 60 days off settlement date or file before the end of the year for the next year hearing. Even though taxes are a deduction against income, they are not a tax credit, and the more you can minimize your expenses the more profit you will end up with. In order to successfully dispute your tax bill you would need to show the comparables and recent sales prices of real estate in your area. You will also need to compare the real estate that was recently sold to your property in terms of structure, number of bedrooms, bathrooms, square footage, amenities, etc.

Capital Gains Taxes. This type of tax is imposed only when you sell the property. The difference between purchase price and sales price is subject to this tax. There are exemptions to homeowners who lived in the property for at least 2 years and the amount of profit. There is a way to defer capital gains taxes by doing a 1031 Exchange. Make sure that you contact an escrow company and do everything within IRS guidelines. According to this IRS rule you can sell your property, find another property, make an offer within 45 days and settle on a new property within 6 month and defer paying capital gains taxes. According to the IRS tax rules, the property you are buying must be “likewise” property, meaning it does not matter if it is bigger as long as it is “investment” just like the one you just sold. So you can buy a single family house and buy an apartment building as long as both were investment properties.

What is essential to know before setting up an LLC?

The NAME. Your business should be in the name of your LLC. Most companies name LLC by the street address, for example 17 Lexington Ave LLC…I prefer to name them by the number and street name only without St..Ave..Ct.etc For example 17 Lexington LLC. It is just easier to remember and shorter to write. When you get a number of LLCs set up it starts getting confusing which one was St or Street or Ave, and the correct spelling of the LLC is essential in absolutely everything you do.

CHECKING NAME AVAILABILITY. Once you pick the name, you need to check the name availability with the Secretary of State Office. In many states in could be done online, and if you go to Secretary of State Office, they can check it there for you as well. I like to go in person to file all paperwork just because I can get everything done right there and get all paperwork in my hands the same day. In state of MD it costs extra for expediated service but it is worth paying because you need to get your bank account and everything else straightened out right away.

ARTICLES OF ORGANIZATION. Articles of Organization is the name documents that lists members and managers of the LLC. It does not have to be registered with the state, at least in MD and NY.

REGISTERED AGENT OR RESIDENT AGENT. An LLC requires a resident agent to serve on behalf of the LLC. It can be a business entity or individual that resides in the state where LLC was formed. For example, if you live in state of New York, you can list your name and address as a registered agent, or hire a company to represent the LLC. If the LLC is formed in another state, it is necessary to have a registered agent in that state.

LLC organizer. Members of LLC or somebody authorized to register LLC.

EXISTENCE of the LLC is perpetual and does not end with the death of its members.


1. Start without a budget. It is necessary to incorporate budget for setting up LLC, which includes filing fees, fees to maintain LLC (in state of Maryland department of assessment and taxation required $300 annual payment just to maintain LLC in good standing), fees that accountant will charge extra at the end of the year to file taxes, some states require LLC to be published and it might be VERY costly (e.g. in New York it can cost a couple thousand dollars, but Maryland does not require publishing at all), initial contribution requirement needs to be met, annual fee to resident agent, separate bank fees might be charged for an business account like checks, monthly service fees.

2. Neglect to check the name availability. It is absolutely crucial to check the name availability for LLC before filing and paying the fee that might be non-refundable! Not only that, if you file paperwork, you wil probably have the same LLC name where the title is transferred to the property and it can become a problem.

3. Always hire an attorney. It is not true that only an attorney can file paperwork and write up documents. Anybody can be qualified to file on behalf of LLC, and in many cases it is unnecessary to pay attorney fees.

4. .Neglect the other paperwork. It needs to be checked what paperwork is required and needs to be filed in each state, and it is YOUR responsibility to check even if you hire a professional to do it for you.

5. Contribute lots of Caputal-might not be a good idea. Each state has a minimum amount required to be contributed to the LLC. Only this amount or what you need is necessary to contribute, because if you need to withdraw funds it becomes distribution of capital which is a taxable event in the eyes of IRS.

6. SKIP over BUY-SELL agreement. It is necessary to have an exit strategy, especially when LLC is a partnership because you never know what can go wrong and it is always better to have everything in writing.

7. Get tax ID later is not a good idea because it is better to get everything right away including a bank account. Without tax id you cant have a bank account and without a separate bank account IRS can disregard LLC as a business entity

8. Just ballpark the income tax. Never estimate what your income and expenses are and keep accurate records of everything. If you have a separate LLC account for the property, write checks from that account for all expenses including maintenance, state fees, property taxes, management fees, advertising fees, and all other expenses related to that property.

9. USING LLC account for personal benefit is absolutely unacceptable and can be VERY COSTLY. If you ever get in a lawsuit, the other party may sephina bank statements. If LLC account was not used solely for the purposes as stated in operating agreement and contain unrelated expenses, the status of the LLC can be disregarded and you can become personally liable for the law suit.