Filing Bankruptcy isn’t Your Only Option

by Atty Piermario Bertolotto, Rizzo & Diersen, SC

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Many events can force you into bankruptcy. These can include unemployment, layoffs or creditors being more aggressive in collection efforts.

Bankruptcy May Not Be Your Only Option

Since these events are often common, many people immediately consider bankruptcy because they’ve been told that bankruptcy is their only option. Or perhaps their bank has commenced a foreclosure action to force a sale of their home. Faced with that, many homeowners think they have no other option but to file bankruptcy and “let their house go.”

Many Options Are Available To You

That conclusion could well be wrong. Bankruptcy doesn’t have to be your only choice. In fact, in Wisconsin, it’s rare that a foreclosure of a primary residence is the sole driving force for a bankruptcy. There are many defenses, programs, and options available to you. Often, you can reinstate or modify the mortgage.

Bankruptcy Should Be The Last Option

Bankruptcy might be the only alternative. But usually, it should be the last option after all others are exhausted. It should be used only when there are many other negative financial factors besides a foreclosure lawsuit.

Contact Us

If you are thinking about bankruptcy, the first thing to do is to gather all of your financial information. Then strongly consider talking to a bankruptcy professional. You not only want to get advice but also discuss – in detail – all of your alternatives.

A professional opinion will give you needed information about the bankruptcy process, all the alternatives, and all of the associated costs.

Contact our bankruptcy attorneys today.

Growing Your Business

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Structuring Business Plans For Individuals And Small Businesses

For numerous individuals and small business owners, the last few years have been filled with tight budgets and many challenges to maintain jobs, cut costs, and compete in their respective markets.  The challenges have been brought mostly because of the state of the economy and the tight job market in recent years.  As part of Attorney Bertolotto’s business law practice, he has the continuing opportunity to assist individuals and small businesses in structuring their business, planning for future business growth and sales, and long term planning.

Planning Your Business In The New Year

Many hope that this year will be a year filled with great achievements, business growth, and economic stability.  Entrepreneurs understand very well the value of planning, setting goals, working towards achieving them, and still have a certain degree of flexibility to modify the plan and goals as the year progresses.  We have summarized below a short, non-exclusive list of steps that many are taking to develop and grow their respective businesses in the new year.  The list is not meant as a static roadmap, but suggestions to take into consideration to devise a plan and foment forward thinking in your respective business enterprise to help achieve planned goals for the year.

A Plan Is Essential

First and foremost, you need a plan.  Without a plan, you are setting yourself up for failure.  It is always a good thing to take a look at the big picture because daily we all tend to concentrate on details and lose track of how those work with each other to get us one step closer to achieving the goals we have set.  Setting specific goals as part of our plan lends itself to keeping us focused on achieving them and turning the plan into a reality.  As part of devising a plan, it is important to establish budgets and look at past years and experiences to be able to avoid surprises and minimize the unexpected.  Constantly reviewing past successes and failures is a necessary tool to tailor a plan, set goals, and stay on track to achieve them.

Current Trends And Developments

Keeping up with and understanding the current trends and developments in our respective industries is essential to implementing a successful plan.  Continuing education in our respective fields and participating in professional groups always helps to sharpen one’s skills, as well as understanding how technology can save time and money, and which technological advances make sense to invest in and implement to facilitate reaching the goals we have set.

Constant Review Of The Plan Is Essential

Finally, a constant and continuing review of the plan and goals set will enable any business owner to modify their plan and make sure it is dynamic enough to overcome unforeseen challenges.  The suggestions mentioned above, coupled with a solid business structure, will enhance success.

Contact our attorneys today.

Tax Season

Tax Problems With Small Business Owners

tax, tax return, tax returns, kenosha, racine, westosha, milwaukee, wisconsin, business, businesses, small businessMany of the tax problems we help resolve at Rizzo & Diersen, S.C. involve small business owners who know how to provide a service but do not appear to understand the concept of self-employment taxes and their effect on the business.  Several years ago, I wrote a short article discussing the importance for small business owners to understand this concept, properly plan for self-employment taxes, and timely pay them.  Those principles are still true today, and with tax time already here, business owners who have not adequately planned or have not been paying throughout the year are in for a rude awakening.

Social Security Payments

As an employee, to receive social security payments when you retire, you and your employer must pay into the Social Security system during your working years.  The Federal Insurance Contribution Act (FICA) is the federal legislation that requires that contributions be made by both the employee and the employer into the Social Security fund.  This is usually done by the employer withholding from your paycheck 6.2% of your wages that are subject to Social Security tax (up to a certain limit) and 1.45% of your wages that are subject to Medicare tax for a total deduction from your paycheck of 7.65%.  Your employer is then required to match this 7.65% for a total payment to the Internal Revenue Service of 15.3% of wages.  It is important to note here that this is in addition to federal and state income tax withholding.

The Self-Employed

For the self-employed, usually sole proprietors and single-member entities, there is corresponding federal legislation called the Self-Employed Contribution Act (SECA).  This is a double whammy to the self-employed because you are both the employee and the employer and, therefore, are responsible for the entire 15.3% on any earnings that your company makes, subject to the upper limit on the Social Security tax.   These taxes are also subject to the estimated tax payment rules, the same as income tax.

Trust Funds Cannot Be Discharged In Bankruptcy

Failure to pay these taxes can be devastating for both your business and you personally.  That is because these types of taxes are considered “Trust Fund” taxes which means they cannot be discharged in bankruptcy and will be assessed against you.  This means all your assets will become subject to levy and seizure in addition to your business assets.

Careful Planning Is Essential

Careful planning throughout the year will minimize the self-employment tax.  Accountants and financial planners can counsel small business owners and assist business owners in implementing various strategies to minimize self-employment tax liability.  A common strategy used is to increase your business-related expenses, as this will cause a reduction in net income, and correspondingly reduce the amount of self-employment tax.   Contrary to some beliefs, regular deductions, such as the standard deduction or itemized deductions, will not lower self-employment tax. Similarly, deductions for health insurance, IRA contributions, or 401(k) contributions will not reduce self-employment tax liability.

The Self-Employment Tax

Same as many other taxes, whether we like it or not, self-employment tax is here to stay.  Timely payments, planning, and learning how to minimize it will ensure that they do not become unmanageable.

Contact our tax attorneys today.