In reference to undertaking a new and arduous endeavor, Chinese philosopher Lao-tzu is quoted as saying, “A journey of a thousand miles begins with a single step.” If he were reincarnated as a modern accountant or business lawyer, he might tell a client about to start another type of new and arduous endeavor, “The key to a successful small business is choosing the right legal entity.” These entities vary widely in terms of difficulty to create and maintain, as well as in their tax and legal advantages. Knowing which one will work best for you — and when you might need to change it — can often be confusing, so let’s take a closer look at four of the most common types. Sole Proprietor Structure: An unincorporated business owned and run by one individual. Difficulty: This is the simplest, least expensive and least painful way to start a business. Just the act of conducting commerce qualifies you as a sole proprietor, though you will have to obtain certain licenses and permits, depending on which state you are in. Pros: It only involves one person (you) so you don’t have to worry about anybody else telling you what to do. As sole proprietor, you can arbitrarily decide when to start your business and when to terminate it, and if you die, it automatically ceases to exist. Taxes are simple as there is no difference between you and your business –- you are taxed as one entity –- reporting your gains and losses with […]

Protecting the financial security of your kids is just as vital as keeping them healthy and making sure they get an education. Yet for many families, the pressure of keeping up with current expenses pushes one strong tool for doing that — buying life insurance — to the bottom of the to-do list. A 2013 survey by life insurance and financial services association LIMRA found that 30 percent of U.S. households have no life insurance at all, and 50 percent think they need more life insurance. The LIMRA survey found that among consumers who say they need to buy life insurance, 86 percent say they haven’t purchased it because it’s too expensive. And more than half of those surveyed said that everyday expenses like food, clothing, transportation, and energy costs limit their ability to save for the future, or to buy life insurance even when they know they need it. Keeping Your Household Afloat What would it cost to keep your household running if your income suddenly went away? That’s the basic question you need to ask when trying to figure out your life insurance needs. “The financial contributions you make to your household are critical to the security of your loved ones, and extend well beyond your income,” says Damon Bates, vice president of MassMutual’s U.S. Insurance Group. “However, many people are uncertain about how to measure their financial contributions, which makes it difficult to determine an appropriate amount of life insurance.” There are some broad rules of thumb when it comes […]