There are three financial statements that every company needs to understand, review and produce, on an annual basis, at a minimum.  These consist of the Profit and Loss statement (P&L), Balance Sheet (BASH) and the Cash Flow statement.  The profit and loss statement, also commonly known as the income statement, shows the changes in the company’s profitability over the course of time.  The profit and loss can be reported in either the Cash or Accrual method.  The cash flow statement is similar, however it shows the company’s income  and outlays in a cash methodology only.  The balance sheet reports the company’s assets and liabilities in a specific snapshot of time.

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Most of the time, children are considered to be an extension of their parents when it comes to legal application until the age of majority.  Therefore, many taxpayers are surprised to learn their child is a separate taxpayer, even as a minor.  If your child has enough income, he or she has an obligation to file a return and pay the tax.  In some cases, you may include their income on your tax return; in others, they’ll have to file their own tax return, or you will have to file a separate return on their behalf.  Whether this is required depends on both the amount and source of the minor’s income.

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It used to be that the term “Section 1031 Exchange” or even “Like-Kind Exchange” was uncommon except in certain circles.  But as the idea of tax strategies have reached more and more taxpayers coupled with the housing market’s fluctuation in recent years, 1031s have become increasingly commonplace.

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While alternative education paths are on the rise, a traditional education track is still the most readily available to most high school graduating classes.  However, college, professional, and graduate schools are more costly than ever.  The cost of higher education surged more than five hundred percent since 1985.  In fact, higher education costs more than four times the amount it did thirty years ago.  Financial challenges are one of the largest qualifiers for non-completion of higher education.  Those lacking a financial cushion and even those with financial assistance, can easily find themselves underwater with the growing requirements and unexpected costs of higher education.  Many of these students find themselves caught between rising costs of completing their education and the jobs available to them if they do not.

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By now, most people have heard the term HSA or Health Savings Account.  But what is it?  A Health Savings Account combines a high deductible health insurance plan with a tax savings account. It operates somewhat like a Flexible Spending Account.  An FSA allows for pretax income to be redirected into an employer-sponsored plan with limitations placed upon it by the employer, but not exceeding $2,600, and does not require a high-deductible health plan to be attached to it.  This plan reimburses you for qualified medical expenses.  The main drawback to an FSA is that it requires that you utilize the funds in the given calendar year.  You are not allowed to carry over the excess into the next year, with limited exceptions.

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