Are you leveraging business tools to improve your personal finances?

For most owners in privately held companies, managing personal finances goes hand in hand with managing business finances. We’ve found that many owners aren’t aware of some key financial tools that can help improve both personal and business performance, including:

1. ESOPs
   Employee Stock Ownership Plans (ESOP) are typically viewed as a benefit, but they’re also a savvy corporate finance tool. They allow owners to sell their stock to the employees without paying capital gains taxes. Before you jump into a plan, though, you should be aware of a few requirements such as the structure of the corporation and that you may need to sell at least 30 percent of your shares. Also consider how the ESOP can be combined with other qualified savings plans, such as 401(k) retirement plans.
   
   
2. Dividends for C corps
   The 2003 tax law changes reduced the individual income tax rates on dividends to 15 percent, effective through 2008. But the law could be repealed before then, so you should explore taking advantage now. Consider dividends as an alternative to bonuses, accumulated earnings, debt forgiveness and other tax reduction tools.
   
   
3. Personal Protection
   How you structure your business as a legal entity certainly affects how well your personal assets are protected, but have you considered other protection avenues such as life and disability insurance or estate planning? Contact one of our privately held business experts if you’d like to talk about ways to protect your business and personal assets.

To learn more about other ways we can help you manage your personal finances, contact one of our privately held business experts.