Author: Leon Clinton

As we continuously seek the best health care solutions for our clients, I want to introduce you to an alternative that may align with your financial goals and personal values: health care sharing ministries (HCSMs).

HCSMs are not your typical health insurance. They are non-profit organizations that enable members with shared religious or ethical beliefs to collectively share medical expenses. This approach is rooted in principles of community and charity, and it operates outside the conventional health insurance framework.

Financial benefits. Often, HCSMs offer lower monthly costs compared to traditional health insurance premiums. While contributions to HCSMs aren’t tax-deductible, for many, the significant savings in monthly expenses outweigh the tax benefits.

Membership requirements. HCSMs may base membership on adherence to lifestyle choices and ethical beliefs, including restrictions on tobacco and illegal drug use and, in some cases, regular church attendance.

Contribution structure. Unlike standard health insurance, HCSMs have contributions instead of premiums. Contributions are generally more affordable and pooled to share members’ medical expenses.

Coverage limitations. It’s important to note that HCSMs are not required to cover certain services mandated under the Affordable Care Act, such as preventive care or birth control.

Regulatory status. Federal regulations under the Affordable Care Act, ERISA, or HIPAA do not apply to HCSMs. Similarly, state insurance regulations do not apply to HCSMs. The lack of regulations means there’s no federal or state guarantee of coverage.

Despite the differences from traditional insurance, many find HCSMs a worthwhile option, especially considering the lower monthly expenses and the flexibility in service selection and doctor choice.

If you want to discuss HCSMs, please call me on my direct line at 408-778-9651.

• By Leon Clinton
• January 23, 2024

If you’re trying to decide between leasing and buying your next business vehicle, one question is probably foremost in your mind:

Which option costs less?

Unfortunately, comparing the costs of leasing and buying isn’t as simple as it looks. To do it right, you must consider not just out-of-pocket costs but also

• cash available,
• the tax benefits of each option, and
• the time value of money.

The Difference between Lease and Buy . . .

When you buy, you own the vehicle free and clear after you repay the loan. So you get the trade-in or sale value of the vehicle when you decide to get rid of it.

When you lease, the dealer or leasing company owns the vehicle, and you pay for its use over the lease term. When the lease ends, you can either buy the vehicle for a “residual value” stated in the lease or walk away and get a new vehicle.

The Gnat’s Whisker

How can you absolutely know whether it’s better to buy or lease? Easy. Just ask us.

If you buy, we’ll find the present value (PV) as follows:

If you lease, we’ll find the present value as follows:

Key point. We enter the numbers such as the cost of the vehicle, down payment, lease payments, etc., in our calculator, and the calculator generates all the information above—the details. And from those details, the calculator gives you the results, which look like this:

Three key points here:

1. You give us the numbers—we enter them in our calculator.
2. The calculator crunches the numbers.
3. You see the result in after-tax cash.

If you want me to make the calculations for you, please call me on my direct line at 408-778-9651.

• By Leon Clinton
• January 16, 2024

The Corporate Transparency Act (CTA) is upon us. It takes effect on January 1, 2024, and imposes a new federal filing requirement for most corporations, limited liability companies (LLCs), and other business entities.

Corporations, LLCs, and other entities subject to the CTA are called “reporting companies.” People who form new reporting companies must file a beneficial ownership information (BOI) report with the Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) within 90 days of forming the company.

The owners of reporting companies created before 2024 must also file a BOI report, but they have until January 1, 2025 (but think December 31, 2024).

Some businesses are exempt from filing—for example, large operating companies with over 20 employees and $5 million in income. There are other, more narrow exemptions as well.

The BOI report must contain the name, the birth date, the address, and an ID number and image of that ID for each “beneficial owner” of the reporting company. These are the human beings who (1) own or control at least 25 percent of the company or (2) exercise “substantial control” over the company.

The BOI report is filed online at a new federal database called BOSS (an acronym for Beneficial Ownership Secure System). There is no filing fee.

Government law enforcement and security agencies will use the data from BOI reports to help combat money laundering, tax evasion, terrorism, and other crimes. It will not be available to the public.

Naturally, people have lots of questions about the BOI report filing requirements—for example:

• Do you have to file a BOI report if you own a single rental property in an LLC? (Yes.)
• Do you have to file 10 BOI reports if you own 10 LLCs? (Yes.)
• Can certified public accountants, enrolled agents, and other non-lawyers file BOI reports for clients without running afoul of unauthorized practice of law rules? (Unclear.)
• Are registered agents responsible for filing the BOI report? (No.)
• Do the self-employed have to file? (No.)
• Do I need to list a street address in the BOI report? (Yes.)
• Do I need to list my Social Security number in the BOI report? (No.)
• Do I need to list my attorney in the BOI report? (Maybe.)
• Must I file an updated BOI report if a beneficial owner leaves the company? (Yes.)
• Do I have to list my minor child in a BOI report? (No.)
• Will criminals file BOI reports? (Who knows?)

I’ve provided some basic answers above. If you have further questions on the new BOI reporting, please call me on my direct line at 408-778-9651.

• By Leon Clinton
• January 11, 2024