2017 Taxes and Healthcare

The Affordable Care Act (ACA) makes it easier to obtain healthcare for most Americans. There are ups and downs to this coverage, and tax penalties apply for those choosing not to get it.

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How does this affect taxes?

Those choosing to waive health insurance for more than three months have to pay a penalty in most cases. What kinds of penalties? Take a look:

The penalty tax is calculated in two ways: you’re charged based on a percentage of the household AGI, or a flat rate. The catch – whichever amount is greater.

2017 Tax Year

2.5% of your total household adjusted gros income. That equates to $695 per adult, and $347.50 per child under the age of 18, up to the maximum amount of $2,085. Your accountant can provide concrete numbers on how much the penalty actually is.

Are there exemptions to the tax penalty? Absolutely. Here’s a quick breakdown:

  • The most inexpensive coverage is more than 8.13% of your household income
  • You did not have insurance for less than three consecutive months in the year
  • Your income is too low and you don’t have to file a tax return
  • You are Native American or can get health services through the Indian Health Service
  • Religion
  • Participation in a health care sharing ministry
  • You have been overseas for more than a year
  • Hardship (homelessness, bankruptcy, eviction, etc.)


You’ll have to claim that exemption when filing taxes for 2017. These penalties rise every year due to inflation. When paying the fees, there are some distinctions:

  • The percentage method only counts the part of your household income above the yearly tax filing requirement.
  • The per person method only counts the individuals in the home that do not have insurance coverage.
  • Having coverage for part of the year will count for something. You’ll pay 1/12 of the annual amount for each month someone in the home does not have coverage. There is a “short gap” exemption that applies – if you only lapse coverage for one or two months, you won’t incur a fee.

Knowing how to prep for the penalties for not having health insurance will help you avoid sticker shock once the tax return is filed. You can estimate how much you will have to pay by using the IRS tool. Your accountant should also be able to let you know how much you will be paying for not having health insurance.

If you feel you qualify for an exemption, have a conversation with your accountant to see if you can get the fee waived.  There are a number of circumstances that qualify, and a licensed tax professional can guide you much better than assuming you cannot get the exemption.

As the rules continue to change, obtaining health insurance for your own well-being is the best choice. If you cannot afford it, you can definitely avoid taking money you don’t have from your budget. File the necessary paperwork to ensure you aren’t caught in the fray. Get your documentation in order, and prepare to file.

Don’t SPOOK Potential Investors with Messy Financial Records

Halloween is right around the corner, and many kids are getting excited to wear their costumes and go door-to-door looking for treats from the neighbors. Even if your business isn’t planning any Halloween activities, it might be a good opportunity to see if you are inadvertently scaring away potential investors.

Bringing investors into your small business is a significant step to help your company grow in the future. But, it is essential that you find the right deal that will set your company up for success. Picking good investors is important to ensure that you are ready for the growth that is possible in your company.

Do You Need Business Investors?

It is a big decision to bring investors into your company. Whether you are in the start-up phases or you have been in business for several years, you need to consider the impact that it could have to bring in investors who are interested in your company.

The main reason that you should consider accepting investment money is that your company is poised for growth and you want to take advantage of a great opportunity. These funds can help to launch the company into higher levels of success. If you don’t have the cash flow or employee base to support this growth, the investment money might be the right solution.

Before you make this decision, it is important that you talk to experienced financial advisors for more information. For example, ongoing accounting services are important so that you can see the financial history of your company. This information will help you track the progress and identify if you are ready to bring in more help and cash flow.

Pros and Cons of Business Investors

As you consider the investment money that is available, look at the pros and cons of bringing in investors. Benefits of investors include:

  • Human Element: Investors don’t always have the same requirements as banks or other financial institutions. If an investor is passionate about the work that you are doing, then they might be interested in trying something new. They want to look at the numbers, but they also want to see the vision of the company. Most investors are established entrepreneurs who are willing to take a little more risk with their funds compared to a bank. If an investor can see the potential of the company, then they won’t be worried about making a larger investment.
  • No Loan Repayment: If you take a loan from the bank, then you will be expected to repay the money regardless of the success of the company. On the other hand, investors are taking a portion of ownership in the company. So, you won’t need to pony-up the cash if the business fails.
  • Higher Odds of Growth: Not only are you receiving money from the investor, but the person might be able to offer insight into business strategy. These investors are usually experienced business players, and they can improve the future growth of your company through their advice and expertise.

Even though there are advantages of business investors, you might run into a few drawbacks as well:

  • Higher Expectations: An investor might be willing to throw in with an unproven business model. Even though they have a higher risk tolerance, this tolerance often comes with higher expectations as well. They want to make money on the deal, not just donate it to your ideas. Most investors want to know the anticipated rate of return that is available.
  • Giving Up Future Earnings: Since you hand over a portion of the ownership to an investor, you will also give up a portion of your future earnings. The deal will be negotiated on the amount of money that the investor puts in. If you experience huge business growth in the future, then you need to consider the amount of earnings that you will need to pay the investor.
  • Hand Over Full Control: During the start-up phase of your company, you have full control over the decisions that are made since you are the sole owner of the business. When you hand out partial ownership to investors, then you are giving up some of the ability to make these decisions. Most investors don’t want to take a hands-off approach to their business dealings. So, you need to be ready to allow them to participate in future decisions that can affect the company.

Investors vs. Bank Assistance

Just because you need financial help, doesn’t mean that you need to hand over some of the control of the company to investors. Some business owners want to maintain as much control as possible, so they look for other financial opportunities instead.

For example, if you are in a bind with cash flow, then you might consider the option to talk to the bank for a small business loan. If you can show the growth of the company and the future success that is possible, then it is likely that your bank will be willing to lend the money to help you continue.

Many small businesses turn to traditional banks, community credit unions, and other financial institutions for the capital requirements of running a company. But, there are times when these financial options won’t be enough. If you talk to the bank and you can’t get enough money to meet your requirements, then it might be time to bring in investors.

What Will Business Investors Be Looking For?

Before you pitch the investment opportunities, you need to be sure that your accounting reports are ready to show. If your books are a mess, then people won’t trust the management of the company. They will view the opportunity as a risk, and walk away.

So, you need to be sure that you are consistent with all the bookkeeping and accounting tasks, allowing you to provide accurate reports when you are ready to bring in investors. The easiest solution is to hire an outsourced accounting team, such as Easier Accounting, before you are ready for the investment money. These services can create the foundation that you need so that you can attract the investors that will set your business up for growth in the future.

In addition to the financial reports, investors often want to learn more about the overall structure and daily activities in the company. Most investors don’t rely only on the financial reports. They want to know about:

  • The problems in the industry and how you are overcoming these issues.
  • The types of acquisitions and mergers that might be available.
  • Retention of top management and key employees.
  • Staffing issues and employee satisfaction.
  • Current and upcoming trends in the industry.
  • How future political and economic factors will influence sales and growth.
  • Inventory and supply flow.
  • Cash flow on a monthly and annual basis.
  • Business assets and liabilities.

How to Find Business Investors

If you make the decision that you need to bring in investors, where do you start? The best solution is to look to your current business community to see if anyone in your network is interested. Talk to a few trusted people, and they will be able to help you connect with parties who might be willing to add their money for the business opportunity.

Another option is to talk to business capital brokers. These brokers stay networked in the community and business world. You can tap into a group of potential investors, and the broker will help you navigate the options to find a good fit.

The potential investors will research your company to see if they are interested in the opportunity. At the same time, you can do your research to see if it is someone that you want to work with. Make sure that you know your investors, and don’t be afraid to ask the right questions regarding their experience and background.

Be ready with detailed financial reports, as well as a fine-tuned pitch for people who might be interested. Know the motivations and interests of the investors, and cater your information to match their preferences. If you have insight into your audience before the meeting, then you can make adjustments with your pitch to increase the likelihood that they will be interested in the investment opportunity.

Don’t forget to bring a solid business plan to the meeting. Potential investors will want to see the history of your company, as well as the possibility for growth in the future. Having a professional business plan will help them see that you are serious about your business efforts.

Where to Find the Financial Support that You Need

Do you feel like you are in over your head trying to keep up with the financial requirements for your company? Then it might be time to hire a team of accounting professionals to help with some of the most important tasks of running a company.

Here at Easier Accounting, we are happy to support your business efforts. Whether you are just getting your start-up off the ground or you are ready to expand with investors, we are here to help. Contact our company to learn about the accounting services that are available: (888) 620-0770

What You Should Do if Your Small Business is Unprofitable?

The first few years of business ownership can be a rocky experience as you are trying to determine if the business will be profitable long-term. During the first few months or years, it is possible that you might see that your business is running in the red. Even if you post a loss, it doesn’t mean that you won’t be successful in the future.

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Should You Give Up or Proceed?

When a small business owner sees that the business isn’t profitable, then it is common to assume that it is time to close the doors and stop offering services. But, don’t rush to conclusions without talking to a financial professional.

The truth is that many businesses struggle financially for a few years. It takes time to build up inventory and a client list. By pushing through right now, you could set up your company for success in future years. Many business owners choose to proceed, but they are hesitant because they don’t know how the financials will pull together.

Plan and Commit to Action

Passion can fuel success in your company. If you still believe in the potential of the company, then you need to be willing to make sacrifices and put in the effort for future success. If you are hesitant about the strategy, then you could potentially hurt your business efforts.

It is essential that you talk to a financial professional to put together a plan. By monitoring the things that have worked, then you can put together a strategy that will lead to success. Having a good plan will give you the confidence that you need to move forward in the right direction. Set a forecast for the potential within your company.

Be Careful with Your Decisions

One common problem is that business owners will make decisions based on emotions instead of logic. For example, a stressful situation might cause a person to invest business funds into a questionable source. Instead of letting yourself make emotional decisions, it is better to talk to an accountant who can offer professional advice.

Run reports to see the details about what is happening within your business. Then, you can put together a strategy based on the numbers. These calculated decisions will ensure that your expectations match up to the potential performance of the company.

Here at Easier Accounting, we know that there are many financial decisions that need to be made in a small business. Contact us so that you can talk to an accountant who can offer the advice that you need: (888) 620-0770

Is it Time to Expand Your Small Business?

As a small business owner, do you ever dream of taking your business to the next level? When done correctly, growing your business will increase revenue and with careful management will increase profits as well. But when is the right time to expand? The timing of these things really matters. Here are a few ways that you can tell it is time to grow:

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1. You’ve Been Profitable For at Least 3 Years

If you have been cash flow positive for several years, it is a good indication that your company is well positioned to expand. Any seasonal ups and downs or one-off project windfalls may not be happening by chance, but rather, it could be evidence that there is a bigger piece of the economic pie available for the taking. Consider expanding.

2. Your Customers Are Requesting More of You

When customer requests for additional offerings, options, locations, products, etc. are consistently received, the timing may be right to grow your company. You are feeling the pulse of market demand. Honoring your customer’s requests may be the right thing to do, and soon.

3. You Cannot Keep Up with the Current Demand for Your Products or Services

Do you find yourself saying to potential customers, “I’m sorry, there is no way I can provide you what you are asking for in a reasonable amount of time.” If this situation happens regularly, you are likely leaving business on the table. It may be the right time to expand your capacity to perform services or provide the product.

4. Business Leads Come to You without Much Effort

If you decide to invest in growing your business, will you need to hustle a lot more to create enough business to pay for the expansion? Or are new leads regularly coming into your pipeline in sufficient quantities that the only limiting factor is how much work you can offer? If leads are abundant, you may want to look at growing.

Here at Easier Accounting, we are familiar with the concerns of our small business accounting clients. We are more than happy to help you work through any accounting questions that might come up when you are considering whether the time is right to expand. We believe in the importance of small businesses and are passionate about helping them to succeed. Contact us to learn more about the services that are available: (888) 620-0770