What Are the Benefits of a Health Care Savings Account?
Video Summary
What are the benefits of a health care savings account? Well this question is probably better asked to your human resources person where you are employed. It’s an alternative to providing health insurance or can be a blended arrangement whereby your employer puts a certain amount of money into your account every month. Therefore, you can use that money for any health care needs you want.
After a certain amount, which is usually a fairly high deductible, then your health insurance would kick in as far as that’s concerned. But you can use this for dental or prescription drugs, anything you’d like as far as your discretionary.
It’s particularly beneficial to people who are very healthy and don’t go to see the doctor very often, other than an occasional physical and don’t get sick, because the money builds up in that account. And so you can use it for cosmetic surgery or dental work or whatever you would like. It’s not particularly beneficial to people who have prescription drugs that are particularly expensive; usually the money that’s deposited isn’t sufficient to cover the amount that the employee has to pay.
So it’s something that your employer does for you or to you in conjunction with providing health insurance for you. So you probably don’t need to call and talk to me about this but that’s my take on a health care savings account. You probably need to talk to the human resources department where you are employed and ask them to give you more information about it. And it’s an alternative to your medical insurance or deductible.
So good luck with that! You can always call me about your legal needs. It’s 727-847-2288.
- Published in Estate Planning, Videos
What Happens to Past Due Property Tax When I Short Sell my Home?
Video Summary
What happens to past due property tax when I short sell the home? Well that’s a fairly easy one. It’s when you short sell your home the property taxes are paid out of closing money and it reduces the amount that your lender receives or agrees to take in satisfaction of their lien and hopefully releases you from any liability on the loan. So those taxes are paid just like any other closing, when you close on your property and sell it to someone else. The back due taxes are paid, since they’re a lien against the real property rather than your personal obligation. So they are all taken care of and it is only up to you to negotiate with your lender that they’ll take the net proceeds less the payment of the real property taxes in satisfaction of the mortgage.
So if you have any questions, well give me a call at 727-847-2288.
- Published in Real Estate, Videos
Ask Thomas Mitchell: How Does an IRA Distribution Affect My Taxes?
Video Summary
Good afternoon. I’m Tom Mitchell, a partner at the law firm of Waller and Mitchell in New Port Richey, Florida; I wanted to talk to you this afternoon for a minute or two about IRAs. Everybody knows what they are, but very few people know exactly how they work.
Basically, there are two types of IRAs. There is the traditional IRA and the Roth IRA, and there are differences between them. In the traditional IRA, you get to make contributions in to the plan. The money that you put in there accrues interest or dividends and its tax free while it’s in there but when you take the money out, then it’s taxed to you as ordinary income.
On the other hand, with the Roth IRA, when you put the money in, there is no current deduction on your income tax return. The money still grows tax-free while it’s in the account but you get to take it out tax exempt at the end of the time when you retire.
So the next question is who can have an IRA? Basically, anybody who is 70 1/2 and with earned income can establish and contribute to an IRA. When you establish and contribute to an IRA, the account is held by a person called a custodian and they will send you statements every year exactly what the balance of your account is. They also report that to the Internal Revenue Service.
So the next question is then when can I start taking money out? And the first answer is you can take money out at 59 1/2 and that’s awesome. You don’t have to take it out then but you can. And the maximum time that you can delay to take out any money out of your account is 70 1/2. And each year the custodian that I spoke of earlier calculates the balance in your account, divides it by your statistical life expectancy and then they send you a check for that amount.
If you take money out before you’re 59 ½, there’s a penalty. If you take money out after 70 1/2 that’s not sufficient to cover your required annual distribution, there’s also a penalty.
So if you have any questions about your IRA account, be sure to give me a call. This is Tom Mitchell with Waller and Mitchell. My number is (727) 847-2288.
Why Do I Have to File Corporate Minutes?
Video Summary
Why do I have to file corporate minutes? Well, first of all you don’t file corporate minutes, other than your corporate record book. The reason you have to have shareholder meetings and board of directors meetings is to act like a corporation, in that you have shareholders and they meet once a year to elect the directors of the corporation and then the directors meet at least once a year and they elect the officers of the corporation and make major decisions as far as the business is concerned. So if you don’t have corporate minutes or corporate meetings or shareholder meetings and directors meetings, then you’re not acting as a corporation. You are just fooling yourself and proceeding on as far as it’s your business and you are incorporated.
So what I find many times is people have incorporated, however, they have not issued any stock. They don’t have a corporate book and they don not do corporate minutes. So what does this mean? Well, if you get sued and they can sue you personally, which is probably one of the biggest reasons why you have a corporation is to limit your liability for the business debts or liabilities. So if you don’t act like a corporation and have shareholder minutes and director minutes, well then you’re not acting like a corporation and therefore, could have personal liability for the debts of the corporation. You also need to be sure that the stock is issued and you have a corporate record book with the stock in it or some record of it.
What you do file with the Secretary of State is your annual report and that costs you $150.00 or $200.00 a year and the reason you have to file that every year is because it’s a form of a tax and if you don’t, why then the Secretary of State will dissolve the corporation. And you need to be sure to file it timely because the penalty is about three times what the filing fee is. So be sure that you file by the deadline, which I believe is May 1 of each year. And you need to be sure you get your annual report filed with the Secretary of State.
So if you’d like for me to assist you in the preparation of your minutes or setting up a corporate record book, give me a call at (727) 847-2288.
- Published in LLC's and Corporations, Videos
Does Transferring a Property Relieve Me of Financial Obligation on the Mortgage?
Video Summary
Does transferring your property relieve you of the financial obligations of a promissory note and mortgage? The answer is no. When you sign a note and mortgage, you sign the note that says, “I promise to pay you, the bank, or a lender, the money, plus interest,” and it outlines the payments. Then you also sign another document, a mortgage, which is a lien against the property so that if the payments are not made on the promissory note, then the lender is in a position to foreclose and take the property away from the owner. So by transferring the property to a third party or to an entity, the bank still has a lien against the property since the lien was recorded before the conveyance and you still have the responsibility under the promissory note.
This is particularly frustrating when you have what they call a “white knight” who says, “Oh, I’ll help you with your foreclosure action. Just deed me the property and I’ll see about trying to make the payments or get the payments paid.” Well, what that does is you lose control of the property but you still have the liability under the promissory note and it still affects your credit.
So transferring property or some people would say deeding your property to a third party, does not relieve you of any debt on the property and you can still be sued and be held responsible for the promissory note if the lender so elects.
So if you have any more questions about transferring the property, trying to avoid liability under your note and mortgage, give me a call at (727) 847-2288. Thank you.
- Published in Real Estate, Videos