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Family Owned Insurance Agency Experienced Insurance Agents

Visit the Newburyport Office or Request a Quote    

Cross Insurance, a family owned independent insurance agency, and their Newburyport insurance agents are ready to assist North Shore customers. The local team of agents provide exceptional customer service with coverage options across an extensive range of personal insurance product, with strong support for commercial insurance customers as well. Visit the Cross Insurance office, conveniently located in Newburyport’s Port Plaza Shopping Center or call to request an insurance quote.

As one of the largest independent insurance agencies in New England, Cross Insurance and its dependable team of insurance agents are able to offer a wide range of personal insurance solutions. Enjoy the convenience of working with one local insurance agency for all of your insurance needs including: homeowners, renters, auto, boat, RV, and umbrella insurance policies as well as health insurance, life insurance and many specialty products too.

Established in 1954, this rapidly growing insurance agency has acquired more than 120 operations since its founding and can provide a range of commercial insurance products for small and large companies. Cross Insurance is one of the leading New England insurance intermediaries, enabling them to support the constantly evolving insurance needs of their broad customer base. Cross Insurance agents offer many lines of coverage including: vehicle fleets, buildings, contents, general & professional liability, cyber liability, workers compensation, employee benefits and bonds.

If you’re a North Shore local looking for an insurance agency to support one or more of your personal or business needs, Cross Insurance’s Newburyport office is eager to work with you. Whether you need a quote for a new line of service or an existing policy up for renewal, give a call to the local Cross Insurance team. With their experience, operations, and knowledgeable insurance agents, they’re ready and available to start your unique insurance conversation today.

Cross Insurance

By Hannah Brown , Newburyport.Com Correspondent, Regional Sales Executive, Personal Lines
I’ve worked in the insurance business for over 15 years and held many different positions within the industry. Working for Cross Insurance has afforded me the resources to put my knowledge to use within the community. What drew me to Cross Insurance was the ability to help people with any insurance need they may have, while still maintaining the feel and service of a small agency. I want to fully protect my clients but also educate them about the coverage we provide. It’s important to me that they feel a part of the process. At the heart of it all, Cross is a family owned business who values hard work and relationships. We look forward to not only helping people in the area protect the things that are most valuable to them, but also to exploring and supporting our new community.

Boat Insurance in MA – Information Boat Owners Should Know

Boat Insurance, Cross Insurance Newburyport

Protecting You Out on the Water
While boat insurance may be the last thing on your mind when you are out on the water, having your boat covered not only gives you peace of mind, but can provide you with a financial safety net for things like injuries or theft. Whether it’s sailing, fishing, or speeding along, boating is a wonderful way to experience the beautiful lakes, rivers, and bays of Massachusetts.

What Can Boat Insurance Cover?
Coverage for physical damage to a boat is one of the most obvious reasons to have a policy. However, liability can be an even more important reason to consider having boat insurance. In fact, many private marinas and docks may also ask you for proof of insurance before they let you dock your boat at their property. It is also important to be prepared for the unexpected such as hurricanes, theft or vandalism.

Does My Homeowners Policy Cover My Boat?
You may be thinking- wait, does my homeowners insurance policy cover my boat as well? In most instances, home insurance policies do not provide adequate coverage to protect your boat. To see what coverages you may need, reach out to a local insurance agent. Cross Insurance- Newburyport is conveniently located in the Port Plaza Shopping Center.

Boat Insurance Quotes

It is important to meet with an experienced insurance agent who can help recommend the right solution based on your specific circumstances. Boat insurance coverage will depend on the type of boat you have, the value of the boat and a number of other factors as well. Cross Insurance- Newburyport offers a broad scope of insurance products. Cross is an independent insurance agency, and can help recommend the best insurance carrier to meet your needs. Policy discounts may be available if the insurance carrier is providing coverage for more than one policy. Let a local agent from the Newburyport Cross Insurance team help navigate the process.

Financial Planning - Experienced Financial Advisors

Seacoast Wealth Management – Providing Clarity to Your Financial Future

Financial Planning with a local team of experienced financial advisors is, in our view, the optimal path to future stability and peace of mind. With almost 60 years of combined financial industry experience, Seacoast Wealth Management has developed a strong client-base throughout the North Shore of Massachusetts, Seacoast NH, Boston and beyond. The Seacoast Wealth Management team is able to provide a proactive, tailored approach to financial planning while also providing exceptional responsiveness for their clients. Seasoned financial advisors work with clients to clearly define financial and personal goals, enabling a more secure future.

As experienced financial planners, they are aware that global happenings and personal life changes are inevitable, making it essential for investment strategies to be adaptable. Financial advisors work with clients to define short term projects and long term retirement planning goals. As part of the ongoing process, Seacoast Wealth Management advisors meet with clients to review goals, make updates if necessary and to confirm that the goals and strategy are aligned.

Seacoast Wealth Management offers a broad scope of financial planning services including: investment management & consulting, insurance planning, trust & estate planning, cash management & lending as well as alternative investments.  Take financial planning off of the to-do-list and schedule a meeting to review your specific needs with a Seacoast Wealth Management financial advisor.

Seacoast Wealth Management of Steward Partners

By Gary Walker , Newburyport.Com Correspondent
Gary Walker serves as New England Sales Director, Founding Partner and Wealth Manager for Seacoast Wealth Management of Steward Partners located in Portsmouth, New Hampshire. Gary brings 20 years of experience in creating financial planning strategies, asset allocation models as well as support with corporate retirement plans. Gary’s practice focuses primarily on high-net-worth individuals and families as well as business owners. Gary works with clients by first listening to clients’ financial situation, goals and aspirations. He then assists clients in designing a long-term investment plan based on the fundamentals of asset allocation, and provides guidance in choosing investments best suited for a client’s needs. Gary earned his BS in Accounting and Finance from Worcester State College. He also earned the designation of Chartered Retirement Plans Specialist (CRPS) from the College of Financial Planning. Gary, his wife Kim and two children, Grayson and Kolby, reside in Kensington, New Hampshire. In his free time, he enjoys golfing, fishing and volunteer coaching for youth sports.

Tax Loss Harvesting & Roth Conversions – Ideas For A Down Year

Tax Loss Harvesting Roth Conversions, Seacoast NH & North Shore MA

Tax Loss Harvesting and Roth Conversions are two strategies that can help many of our Seacoast NH and North Shore MA clients make the best of a down year. 2022 has presented many challenges in the market such as inflation, interest rates, geopolitical conflict and lingering covid restrictions. As a result, we have seen bouts of volatility and ultimately negative year-to-date returns for both equity and fixed income indexes. While years like this can be tough to stomach, it is important to know they can also create opportunities that can be taken advantage of with prudent planning. During these years, many investors may elect to hold their investments and others may allocate to cash out of fear. It is certainly hard to criticize a buy-and-hold investment philosophy, but there may be some opportunities that investors are missing by taking this approach. Please read below about Tax Loss Harvesting and Roth Conversions, two strategies Seacoast Wealth Management of Steward Partners is implementing with clients to take advantage of down markets like we have seen so far in 2022.

Tax-loss Harvesting:

Investors with taxable (non-qualified) investment accounts can implement a strategy called tax loss harvesting where a security is sold at a value less than what it was purchased for, creating a realized capital loss. These losses can be used to offset any realized capital gains you may have in your accounts this year – mitigating your tax bill. In a situation where an investor does not have any realized capital gains or the losses generated are in excess of capital gains during the year, investors can carry those losses forward to offset any potential gains in future years. While it may seem counterintuitive to sell a security at a loss, it can enhance the tax-efficiency of your portfolio which, in our view, is worthwhile to explore.

Roth Conversions:

Traditional IRA assets are a cornerstone of many portfolios due to their accessibility and tax advantages. Some of these advantages are due to the fact they are funded with pre-tax dollars and in turn, are deducted from taxable income for that year. The assets will grow tax-deferred in the account and the distributions are taxed at ordinary income – penalty free if taken after age 59.5.  In down years like we have seen in 2022, it may make sense to conduct a Roth IRA Conversion while the account value is suppressed. With this strategy, an investor can convert all or a portion of their traditional IRA into a Roth, paying ordinary income tax on the amount converted. The benefit of implementing this strategy would be to take advantage of the tax-deferred growth and tax-free distributions after age 59.5. On top of that, Roth IRA’s are not subject to Required Minimum distributions at age 72, allowing investments to grow tax-deferred over an investor’s lifetime.

***As financial advisors, we are not licensed to give tax advice, so we recommend consulting a tax advisor before implementing these strategies***

While this year’s market has presented challenges for even the most steadfast investors, there are also opportunities that have been created that are worth exploring. If you have not had the discussion on either of the above strategies or would like to know more, please reach out to us for a seacoastwealthmanagement@stewardpartners.com for a no-cost consultation.

 

Address: 145 Maplewood Ave. STE 100, Portsmouth, NH 03801

Phone: 603.427.8855

Securities and investment advisory services offered through Steward Partners Investment Solutions, LLC, registered broker/dealer, member FINRA/SIPC, and SEC registered investment adviser.   Investment Advisory Services may also be offered through Steward Partners Investment Advisory, LLC, an SEC registered investment adviser.   Steward Partners Investment Solutions, LLC, Steward Partners Investment Advisory, LLC, and Steward Partners Global Advisory, LLC are affiliates and separately operated.  Seacoast Wealth Management is a team at Steward Partners.

Mortgages & Home Loans - CrossCountry

Local Mortgage Experts | Low Rates |Fast Process | Exceptional Service | Experienced Brokers

As a residential mortgages industry leader, CrossCountry Mortgage has established a reputation as one of the country’s most trusted mortgage lenders specializing in home loans and providing the convenience of working with experienced loan officers in local markets, such as Newburyport. CrossCountry Mortgage has set the standard for exceptional customer satisfaction with the use of innovative technology and a streamlined simplistic application and approval process. The local Newburyport branch has a proven track record of providing excellent service for many customers throughout the Massachusetts North Shore, Southern NH Seacoast and Southern ME region.

In addition to providing highly responsive customer care, CrossCountry Mortgage is able to service a broad scope of customer mortgage needs due to their extensive portfolio of home loan products including Purchase Loans and Refinance as well as specialized products such as:  VA Loans, FHA Loans, Renovation Loans, Jumbo Loans, and many more.  With this robust selection of lending products, CrossCountry Mortgage has a solution for each of their customer’s individual needs.

CrossCountry Mortgage has been able to achieve exceptional customer satisfaction results for their mortgage customers due to the fact that they very closely manage the loan process ensuring that all of the many important steps have been accurately completed. The lending process can be complex but the team at CrossCountry has many years of experience handling the details and simplifying the mortgage experience for their customers. CrossCountry Mortgage keeps the process in house: underwriting, processing & direct funding, enabling themselves to control the many steps of mortgages, thus ensuring happy customers.

If you prefer to focus on your new dream home or how you might utilize the savings from your refinanced loan, then we highly recommend a call to Liz Ryan.  Let the mortgage experts at CrossCountry do the heavy lifting.  With their exceptional customer care, broad product portfolio and strong industry experience, CrossCountry Mortgage is the Best of Newburyport Residential Mortgage Company.

CrossCountry Mortgage

By Liz Ryan , Newburyport.com Correspondent
Sales Manager for the Newburyport CrossCountry Mortgage regional office, Liz Ryan is a top producing Senior Loan Officer with extensive experience in the mortgage industry since 2005 and a prior background in real estate. Born in Sweden and raised with a “can do” attitude and great work ethic, Liz is a consistent Chairman’s Circle member and has served as a strong mentor for the rapidly growing Newburyport office, supporting customers in MA, NH and ME. Liz is highly respected by her local finance industry peers and greatly appreciated by her extensive following of loyal customers. Her passion for serving clients is apparent. Liz enjoys working with customers from all walks of life with a broad range of financial needs. Whether they are purchasing their first home, a vacation home, an investment property; or they need assistance with a refinance or a more specialized loan product such as a VA Loan, Liz always excited to help.

Refinance Your Mortgage…Factors to Consider with a Refi

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Refi Evaluation: term & debt consolidation

Refinance your mortgage? When considering a refi, you’ll want to evaluate your particular situation—not just the interest rates and global environment.

In preparation for a refinance, you’ll want to ask yourself important questions. How long do you intend to live in your current home? Should you refinance to a new 30 year mortgage extending the time it will take to own your home? Are you in a position to consider a shorter term enabling you to pay less interest over the course of the loan? Changing the term on a mortgage (for example, from 30 years to 15 years) can help you achieve specific financial goals. Shortening your mortgage term may help you avoid penalty clauses if you plan to pay off your loan early. If you refi with a shorter term, you will pay less interest over the life of your loan. You may also be able to extend your repayment term if needed.

When considering a refinance make sure to look at the big picture. Do you have other loans? Are there major expenses that you need to plan for: college, weddings or home renovations? Consolidating multiple debts into one easy-to-manage loan can make life easier and potentially save you money, particularly if other debts feature higher interest rates. Converting multiple mortgages into one mortgage can make repayment simpler and potentially save you money.

Make sure you have access to an industry-leading tool like the CrossCountry refinance calculator to help you decide if refinancing your home makes sound financial sense.

Other Refinance Considerations:

Besides mortgage rates, there are charges and fees that must be considered when determining the costs of a refinance.

Closing Costs

Closing costs are expenses over and above the price of the property that are incurred by buyers and sellers when transferring ownership of a property. They normally include an origination fee, charges for title insurance and escrow costs, etc.

In addition to your down payment, you’ll be responsible for paying closing costs — the fees that CrossCountry Mortgage and other parties charge as part of the home financing process.

Closing costs and fees can be paid at the time of closing or they can be wrapped into the new mortgage. It may be appealing to have costs wrapped into the loan but it is important to consider whether you will realize the the lower interest rate savings before you sell your home.

If you need assistance refinancing your mortgage or are considering any type of home loan products, contact the local CrossCountry Mortgage office and they will help guide you through the process. Liz Ryan NMLS ID: 441907 – NMLS ID #3029 (For licensing information, go to www.nmlsconsumeraccess.org) Equal Housing Lender. Conditions may apply.

 

Newburyport Family Law Practice with a Team of Experienced Divorce Lawyers

Rebuild A Strong Stable Future

The divorce lawyers from Newburyport Family Law Practice, Turco Legal are a highly experienced team of top divorce attorneys committed to helping guide clients to a brighter future. The team approach is a important element of the Turco Legal approach that has been found to be highly beneficial for clients. The combined effort of multiple divorce lawyers versus just one can certainly be more efficient and can also result in more thoughtful solutions developed from a broader scope of collaborative knowledge and experience.

Working with an experienced Newburyport Divorce Attorney and Family Law Practice is the key to building a strong stable future for yourself and your family. Divorce is one of the most significant emotional and financial decisions you will make in your lifetime. You don’t need a new best friend. You need a trusted and experienced adviser who can help you make informed decisions.

It is critical to choose a family law practice with an experienced divorce lawyer who can assist clients with the many complex decisions that must be considered throughout the divorce process. Many of these decisions will have long-term implications, so make sure you understand the ramifications of your decisions.  It is critical to work with a Newburyport Divorce Attorney and Family Law Practice with tremendous experience helping families navigate these stressful times.  Damian Turco of Turco Legal has seen every scenario imaginable, giving him the knowledge to advise his clients regarding the many complex issues associated with divorce. He is a good listener and asks critical questions to help his clients make decisions that will enable them to move their lives in a positive direction.

Every situation is unique and knowledge of divorce law trends and legal precedence from other cases can be critical knowledge that is more efficiently gathered and analyzed by a team of divorce lawyers. With the many complex legal issues, it is essential to develop a strategy for addressing key issues.

  • How will you determine an appropriate and fair amount of child support
  • Duration of time child support should be paid and what it should cover
  • Health insurance and other uninsured health care costs
  • What other expenses can a court order paid
  • What if your child has scholastic or medical needs that exceed approved support
  • Tax dependency exemption
  • Alimony guidelines and timelines
  • Fair and reasonable property division

If your looking for a top Newburyport Divorce Attorney and Family Law Practice give a call to Turco Legal and let Damian and his team help give you peace of mind and guide you to a brighter future.

By Damian Turco , Newburyport.Com Correspondent
Founder & Principal Attorney of Turco Legal, Attorney Turco is highly regarded as an expert in the areas of divorce and family law. He has represented hundreds of clients through divorces, modifications, contempt matters, and other family law matters from beginning to end. He sits on multiple committees for the Mass Bar Association, has been recognized by Massachusetts Lawyers Weekly as one of the state’s upcoming top 25 lawyers of 2015. Attorney Turco’s donates considerable time to help within the community. He serves on the board of LARC, a legal non-profit that helps thousands of lower income folks get desperately needed legal help. He also volunteers his time monthly delivering legal assistance at homeless shelters, day shelters, and soup kitchen’s in Boston, Lowell, Lawrence, and Salem.

Trends in Massachusetts Divorce Law: Equality and Structure

Turco Legal, Divorce Law Trends, Newburyport MA

Divorce law trends are moving in a direction of equality and structure. Divorce may seem like a modern issue.  That is, it sometimes seems like one of those problems with society that’s far worse now than it used to be.  Perhaps that’s because it’s the type of thing that nobody seems to discuss until it’s happening to them, especially not in a tight community like Newburyport.  Or maybe because it is consistently ranked as one of the greatest challenges one may face in his or her lifetime.  Who wants to talk about that?

Actually, despite it not being talked about much, it’s been an important and impactful part of society since shortly after the existence of marriage.  Its prevalence has fluctuated over the thousands of years of recorded history and the trend has largely followed the influence of religion on government and society generally.

While there is disparity around the world as to the popularity of divorce, it is clear that in Massachusetts, like most states, the law is trending from what we would consider traditional to a system of equality and structure.  Here’s how the main issues in divorce are treated in Massachusetts and are trending nationally today.

Child custody” is still the terminology used in Massachusetts, but many states have done away with it, instead opting for more neutral terms such as “time sharing”, reflecting a growing national view of co-parenting that makes it a point to not characterize children as property or either parent as the “primary” one.  While most divorces with children still result in one parent having about a third of the time and the other having two thirds, there are more judgments granting equal time between parents than ever.  Family Law Judges in Massachusetts continue to have broad discretion in fashioning parenting schedules, so putting the relevant facts about ones case into evidence is just as critical as ever.

Child support is treated as a statutory calculation, considering the income of the parties, the parenting schedule, employment-related child care, and health insurance in nearly every state.  While there is not much movement nationally on this issue, every state periodically adjusts the guidelines figures, so the amount set for child support tends to go up over time.

Alimony is perhaps the most inconsistently treated issue across the country, recently having been overhauled in Massachusetts in 2011.  While some states have actually done away with permanent alimony altogether, Massachusetts has added more structure and limitation into the law.  Permanent alimony is now generally only available in Massachusetts when the marriage lasted over 20 years, with shorter term types of alimony are more tailored to the situation.  Generally, the longer you’ve been married, the longer the alimony is likely available, if available at all.

Property division is unique in Massachusetts, with judges having more discretion than in most other states.  That’s because in Massachusetts all property is part of the marital estate subject to division by the court including premarital property, gifts, and inheritances.  Many states carve these types of assets out of the marital estate, but in Massachusetts we give judge’s more authority to determine an equitable or fair result.

Massachusetts divorce law is quite sophisticated.  We live in a community of highly intelligent, hardworking, family-focused individuals who for many can’t avoid the realty of the breakdown of a marriage.  There will always be an element of loss associated with divorce and that comes with a grieving period.  But, when properly educated on divorce law and with the right counsel and support, more parties can and do move on to a better life.  So, if you’re facing divorce and living in our community, don’t be afraid of the issues.  While you may not want to discuss it over drinks at your favorite local restaurant or while the kids circle you at the candy shop, there are plenty of Newburyport divorce lawyers, including me, who will help you through the process.

 

Greater Seacoast Community Bank

Journey Well with Newburyport Bank

Life is full of different adventures, from starting a family, buying a home, to embarking on a business dream. Whatever journey you’re on, it helps to have the support of Newburyport Bank, a mutual savings bank headquartered in Newburyport, Massachusetts. The community bank has 11 locations in Massachusetts and New Hampshire and over $1.2 billion in assets.

This strong, independent community partner is committed to helping you journey well. Since 1854, the local bank has served as a financial guide for the people and businesses of the Greater Seacoast, offering a complete range of personal and business products and services, as well as advanced technologies in online and mobile banking.

Newburyport Bank is actively involved in the betterment of the communities they serve, and are well positioned to help you navigate what’s ahead, support you during challenges, and help find solutions that serve you well today and in your future.

The bank has invested in state-of-the-art facilities to support the “Universal Banker Model,” which helps you connect to a banker quickly and all but eliminates traditional teller lines. Highly skilled bankers are prepared to handle your needs from simple to complex.

Committed to providing specialized services to meet the needs of its diverse customer base, Newburyport Bank offers Private Client Group, which assists high-net-worth individuals in their banking needs. In addition, the bank offers products and services designed for government entities, nonprofit organizations, veteran-owned businesses, medical professionals and more.

A big supporter of philanthropy, the bank founded the Newburyport Bank Charitable Foundation in 2003 to carry out its mission of helping neighbors and businesses navigate life’s journey well. Supported solely by Newburyport Bank, the Foundation provides grants to nonprofit organizations located in the greater Newburyport and New Hampshire Seacoast areas. Since the Foundation’s inception, the bank has contributed over $4 million and the Foundation has made awards of more than $3 million.

As a premier employer in Massachusetts and Southern New Hampshire Seacoast, the bank is dedicated to developing talented, committed and passionate employees who provide attentive service and give back to community through numerous volunteer efforts.

Deposits at Newburyport Bank are federally insured by the Federal Deposit Insurance Corporation (FDIC), with excess insurance provided by the Depositors Insurance Fund (DIF).

Newburyport Bank

By Laura Bentley , Newburyport.Com Correspondent
Owner of Newburyport.Com, Laura manages Business Development, Fundraising, the VIP Program, Blogging and the Events Calendar.

Historic Carousel on Salisbury Beach – Newburyport Bank $250K Donation

Historic Carousel, Salisbury Beach

A historic carousel will soon call a brand new pavilion on Salisbury Beach home thanks to the efforts of the Salisbury Beach Partnership andHistoric Carousel, Salisbury Beach a generous $250K donation from Newburyport Bank—a true community bank that gives back to the neighborhoods it serves. This project is part of a greater effort to restore Salisbury’s waterfront, creating a year-round family-oriented destination.

The pavilion will be constructed at a space on Broadway that has been vacant for 25 years, donated by Partnership President Wayne Capolupo and his family. Along with the historic carousel, the pavilion will also house a much-needed Newburyport Bank micro branch and event space for birthday parties and weddings.

The wooden hand-carved carousel, dating back to 1909, was built by W.F. Mangels at the Looff factory in East Providence, Rhode Island. During its heyday, the Looff carousel whirled and twirled at Harveys Lake Amusement Park in Pennsylvania. Now 112 years later, the historic carousel has been completely restored and will once again bring smiles to riders—big and small.

Historic Carousel, Salisbury Beach The carousel, one of only 300 of its kind, is made up of 44 hand-carved and painted wooden animals—including horses, giraffes, camels, and goats. As part of the fundraising for the project, families and local businesses can “adopt” one of the animals and sponsor it for the next 20 years.

Along with the Adopt a Horse program, all proceeds from this year’s Sea Festival of Trees, where 12 of the horses were on display, will go to the historic carousel and pavilion. The Salisbury Beach Partnership will continue to raise up to $1 million in funds for the Campaign for the Carousel.

The Salisbury waterfront is no stranger to having a beautiful carousel for locals and visitors to enjoy. The Broadway Flying Horses, the original Salisbury carousel, was a beloved family tradition for over 60 years before being sold off and moved to Santa Monica, California in 2019. The new addition of the pavilion and historic carousel, along with many other investment like the new Welcome Center, Comfort Station, and oceanfront boardwalk will truly bring back the magic of the Salisbury.

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Accounting & Taxes for Personal & Business

Sound Tax Strategy Means Financial Peace of Mind

Strategy for accounting & taxes is critical.  Is your accountant a valued partner you can trust to guide you with key tax decisions?  All CPA’s, process returns but great CPA’s can enlighten you on various tax options and the advantages and disadvantages associated with your decisions.  Michael Capo, CPA, P.C and his team have extensive experience with both personal and business accounting and taxes.

On the personal side there are many decisions we can make that will provide tax benefit.  Are you utilizing all of the deductions available to you?  Are you tracking personal expenses with a program such as QuickBooks?  In addition to providing valuable budgeting information, these programs can make tax preparation far more simplistic enabling you to quickly pull a report to calculate deductible expenses such as home office, daycare, charitable contributions and so much more.  Do you need help learning to utilize these sorts of tools?  The Michael Capo team has extensive experience and can provide training assistance.

Do you own a business?  Is your business incorporated?  Are you aware of the tax ramifications of an S Corp versus and LLC?  Do you need assistance managing payroll taxes or preparing estimates for your quarterly return?  Michael Capo and team have extensive experience working with businesses and helping to ensure that they are using the most productive processes to manage invoicing and payroll, 401K decisions etc.  It is critical to have sound tax processes in place from the start in order for your business to scale efficiently.

Whether your tax needs are personal, business or both we highly recommend you consider the Best of Newburyport tax Experts at Michael Capo, CPA, PC.

Michael Capo, CPA, P.C.

By Michael Capo , Newburyport.Com Correspondent
President of Michael Capo CPA, P.C. Mike has over 25 years of accounting and finance experience in corporate, individual, independent and government environments. Mike's extensive knowledge is invaluable to his clients and allows him to provide a consultative approach personalized to each of his business and personal tax clients.

S Corporation Advantages and Disadvantages

S Corporation Advantages, Michael Capo, Newburyport

What are S Corporation advantages and disadvantages?  Frequently, this question arises whenever a client is just starting a business, or has been operating as a sole proprietor and may be wondering about the tax advantages of incorporating as an S Corporation.  Also, many clients assume it will be too costly or time-consuming to incorporate—but neither is the case.  The following is a brief outline and comparison of an S Corporation advantages and disadvantages.  However, please feel free to set up a consultation to discuss your specific business opportunity needs and whether or not an S Corporation is right for you.

What is an S corporation?

Essentially, an S corporation is a corporation that is treated, for federal tax purposes, as a pass-through entity through an election made with the Internal Revenue Service (IRS) to be considered an S Corporation. What does that mean?

As a corporation, an S corporation is created through filing Articles of Incorporation with the Mass. Secretary of State. It issues stock and is governed as a corporation. The owners, who are called shareholders, have the same protection from liability as shareholders of a C Corporation.  An S corporation shareholder’s personal assets, such as personal bank accounts, cannot be seized to satisfy business liabilities.

However, like a sole proprietor or a partnership, an S corporation passes through its income and loss items to the shareholders. Unlike a regular corporation, there is no “double taxation,” once at the corporate level and again on the individual shareholder level. Each shareholder is subject to his or her own individual tax rate on the income (or losses) passed through to him or her at year-end. The following are S Corporation advantages and disadvantages to consider.

S corporation advantages

The advantages of an S corporation often outweigh any perceived disadvantages. The S corporation structure can be especially beneficial when it comes time to transfer ownership or discontinue the business. These advantages are typically unavailable to sole proprietors and general partnerships. S corporation advantages include:

  • Protected assets. An S corporation protects the personal assets of its shareholders. A shareholder is not personally responsible for the business debts and liabilities of the corporation as long as there is no personal guarantee. Creditors cannot pursue the personal assets (house, bank accounts, etc.) of the shareholders to pay business debts. In a sole proprietor or general partnership, owners and the business are legally considered the same—leaving personal assets vulnerable.
  • Pass-through taxation. An S corporation does not pay federal taxes at the corporate level.  Any business income or loss is “passed through” to shareholders who report it on their personal income tax returns. This means that business losses can offset other income on the shareholders’ tax returns. This can be extremely helpful in the startup phase of a new business.
  • Tax-favorable characterization of income. S corporation shareholders can be employees of the business and draw salaries as employees. They can also receive distributions from the corporation that are tax-free to the extent of their investment (basis) in the corporation. A reasonable characterization of distributions as salary or dividends can help the owner reduce self-employment tax liability, while still generating business expenses and wages paid deductions for the corporation.  This is one of the major advantages why an S Corporation is preferred by most privately owned businesses.
  • Straightforward transfer of ownership. Interests in an S corporation can be freely transferred without triggering adverse tax consequences. (In a partnership or an LLC, the transfer of more than a 50-percent interest can trigger the termination of the entity.) The S corporation does not need to make adjustments to property basis or comply with complicated accounting rules when an ownership interest is transferred.

S corporation disadvantages

An S corporation may have some potential disadvantages, including:

  • Formation and ongoing expenses. To operate as an S corporation, it is necessary to first incorporate the business by filing Articles of Incorporation with the Mass. Secretary of State and pay the appropriate fees. Massachusetts also imposes ongoing yearly fees, such as an annual report and excise tax fees. Although these fees usually are not expensive, and can be deducted as a cost of doing business, they are expenses that a sole proprietor or general partnership will not incur.
  • Stock ownership restrictions. An S corporation can have only one class of stock, although it can have both voting and non-voting shares. Therefore, there can’t be different classes of investors who are entitled to different dividends or distribution rights. Also, there cannot be more than 100 shareholders. Foreign ownership is prohibited, as is ownership by certain types of trusts and other entities. Typically, this is not an issue with locally private owned businesses.
  • Closer IRS scrutiny. Because amounts distributed to a shareholder can be dividends or salary, the IRS scrutinizes payments to make sure the characterization conforms to reality. As a result, dividends may be re-characterized as wages, which subjects the corporation to employment tax liability.  This is one particular area that needs to be discussed in great lengths to assure that a shareholder is taking the proper amount of salary.
  • Less flexibility in allocating income and loss. Because of the one class of stock restriction, an S corporation cannot easily allocate losses or income to specific shareholders. Allocation of income and loss is governed by the percentage of stock ownership, unlike a partnership or LLC where the allocation can be set in the operating agreement.

If you are interested in further exploring S Corporation advantages and disadvantages in regards to your specific business, contact the offices of Michael Capo, CPA. P.C. to schedule a meeting, 978-499-4300.

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