24 episodes

Host Charles Musgrove discusses the topics that matter to your business, like impacts of legalized marijuana to the work place, independent contractor vs. employee, cyber security, mail order and sales tax, plus many other topics that are critical to business success. Expert and entertaining guests along with awesome content make for a must-hear podcast.

Business Matters Charles Musgrove

    • Management

Host Charles Musgrove discusses the topics that matter to your business, like impacts of legalized marijuana to the work place, independent contractor vs. employee, cyber security, mail order and sales tax, plus many other topics that are critical to business success. Expert and entertaining guests along with awesome content make for a must-hear podcast.

    Who Should Own Disability Insurance? How are benefits taxed? Also, How can Life Insurance be used in Ownership Transition?

    Who Should Own Disability Insurance? How are benefits taxed? Also, How can Life Insurance be used in Ownership Transition?

    In this episode Charles Musgrove and guest Taylor Hodges with Southern Capital discuss important information about disability insurance and life insurance. These policy types provide the beneficiary and owner a method to cover for those events that cannot be paid from available cash. From Smart About MoneyWhy You Need Disability InsuranceDisability insurance provides a source of income to people who are unable to work due to an accident or illness. Remember that your earning power is one of your greatest financial assets. Without disability insurance protection, workers and their dependents are “living on the edge,” at risk of losing their homes and investments. If you need disability insurance, take a look at the details:The average disability claim lasts almost 13 months and mortgage foreclosures due to disability occur 16 times as often as they do for death. Yet, more than 40 percent of full-time workers do not have coverage in the event of a short- or long-term disability to protect against a loss of income.Research indicates that one-third of employed Americans will become disabled for at least 90 days at some point in their career. Yet, lack of disability insurance is a common financial error.Adequate disability policies generally need to be purchased individually from an insurance agent. While some employers provide disability coverage, it is generally short-term and may replace only a small portion of a worker’s salary. In addition, if the employer pays for coverage, benefits are taxable.Disability insurance is especially critical for self-employed workers and those who lack the ability to “bank” employer-paid sick leave. Financial experts generally advise purchasing a policy to replace about two-thirds (60 percent to 70 percent) of a worker’s monthly income. Insurance companies usually don’t provide coverage above this or it would discourage people from returning to work.Two key features of disability insurance, that greatly influence its cost, are the definition of disability and the elimination period. “Own occupation” policies are more expensive because they kick in when you are unable to perform duties of the job for which you are trained — which means, even if you’re still able to do other types of jobs, but you are not able to do your chosen profession, then you can collect on the disability insurance. On the other hand, “any occupation” coverage defines disability as the inability to do any type of work. Many insurers also offer “split definition” policies that use an “own occupation” definition for several years, followed by an “any occupation” definition later on.The elimination (waiting) period is the number of days after a disability begins before benefits are paid. The longer the elimination period (for example, 90 days versus 30 days), the lower the premium for a specified amount (for example, $1,500 a month) of disability insurance.Read the fine print. Look for a disability insurance policy that is non-cancelable or guaranteed renewable and pays residual benefits to make up for lost income when a worker is unable to work at full capacity. For example, if an insured person goes back to work three days a week at 60 percent of full pay, the benefit would be prorated to reflect the actual amount of income lost.Review the recurrent disability clause that describes what happens if an insured person becomes disabled again from a preexisting disability. For example, if someone becomes disabled again from the same cause, say, within six months of returning to work, they may not have to wait for another elimination period.Consider purchasing a cost-of-living rider to protect the purchasing power of monthly benefits. Also check provisions related to disability benefits provided by an employer disability policy or Social Security. Sometimes income from these sources will be c

    • 32 min
    Tips on How to be an Effective Board Member for Your Non Profit

    Tips on How to be an Effective Board Member for Your Non Profit

    In this episode, Charles Musgrove talks with nonprofit expert and consultant, Alyce Lee Stansbury about effective boards. Board members play a vital role in the success or failure of nonprofits. Alyce Lee talks about the importance of nonprofits in a community and she shares her tips on what should be done to enhance the success rate of a nonprofit board. Learn how to be a better board member and how to improve the board that you serve. Other topics discussed on this episode:Importance and role of nonprofit sectorNonprofits are businesses [501c3 is a tax designation, not a business plan]Role and purpose of nonprofit BoardsWhat to ask/consider before agreeing to serve on a nonprofit BoardDo you have a passion for the mission and time to serve?Need for regular board self-assessmentImportance of paying competitive salary for chief ExecutiveWhy Boards fail [i.e. good, bad & the ugly of board service; what can go wrong]What high performing Board members need to know/do to be effective & enjoy the experienceAlyce Lee Stansbury, CFRE, Founder & President of Stansbury Consulting, is a nonprofit expert, 25-year fundraising veteran, and seasoned advisor in nonprofit management and board development. She has raised millions of dollars and helped her clients grow fundraising results by over 200%, build high-performing volunteer boards, and exceed campaign goals by 45%.She is nationally certified by Association of Fundraising Professionals as a Master Trainer in Fundraising, past President of the Big Bend chapter of AFP, and the chapter’s first recipient of the Outstanding Fundraising Professional Award. She has maintained the Certified Fund Raising Executive (CFRE) credential since 2002.Alyce Lee is a well-respected, trusted advisor and sought-after speaker throughout Florida and the Southeast.  She co-writes a weekly column called, “Notes on Nonprofits”, for the Tallahassee Democrat – USA Today Network.   She is a founding Board member and Past Chair of the Institute for Nonprofit Innovation and Excellence in Tallahassee and has served on numerous state and local boards.Top 15 Non-profit Board Governance MistakesPosted on October 5, 2009 by Ellis CarterThis list was started as the inaugural post to CharityLawyer Blog. The post struck a nerve, was mentioned by the Chronicle of Philanthropy, the Nonprofit Quarterly, and numerous bloggers and twitter users. San Francisco tax-exempt organizations lawyer and publisher of the Nonprofit Law Blog, Gene Takagi, reviewed the list and added five more governance mistakes from his own experience. The expanded list is instructive and therefore I have posted it in its entirety here.Failing to Understand Fiduciary Duties. When you volunteer to serve as a director or officer of a non-profit, you accept the responsibility to act with the duties of good faith, due care and loyalty. You also accept the potential liability for failing to fulfill those duties. Increased scrutiny from the I.R.S., Congress, state attorneys general, the Department of Justice, donors and the media require vigilance at every step. It is no longer sufficient to rubber stamp committee or staff recommendations or to simply “abstain” from dicey decisions. Today, board service comes with real responsibilities and real consequences for those that fail to live up to them.Failing to Provide Effective Oversight. Boards are entitled to delegate tasks to committees, officers, staff, or in certain cases, professionals, but only if they perform sufficient oversight. Oversight is commonly exercised through policies and procedures so long as the board ensures that the policies and procedures are actually followed. Common oversight mechanisms include review of financial statements and the annual Form 990 as well as the implementation of various governance policies. Popular governance policies for nonprofits include conflict o

    • 33 min
    You're Fired! Can You, Should You and How to Terminate an Employee ... Do it Right and Reduce Your Risk!

    You're Fired! Can You, Should You and How to Terminate an Employee ... Do it Right and Reduce Your Risk!

    In this episode, host Charles Musgrove discusses employee terminations with attorney Scott Callen. There are many factors that the employer should consider before terminating an employee. Terminations are sensitive for both the employer and employee and it is a critical time in the life of the business and the individual employee. Make sure it is the right course of action and that the right steps are taken. Not doing so, could result in unnecessary pain and suffering to all parties involved. Listen to this episode for more nuggets of knowledge.Below is an article published on-line by Inc. on this subject. How to Fire an Employee Without Being SuedFiring an employee may be a sticky subject, but by creating a plan of action and following procedure, you'll avoid lawsuits associated with terminating an employee illegally.   By Inc. Staff   Firing an employee may be a necessary act but it has the potential to be a legal minefield. Terminations can lead to legal claims based on a variety of potential allegations, including discrimination, retaliation, wrongful discharge, wage and hour liability, defamation, and so on. Mishandle firing an employee, or terminate someone in the heat of an argument without paving the groundwork, and your business and its employees could be paying for it for years to come. And, yet, firing an underperforming or troubled employee may be the best move for your business. It may improve morale among better performers. It may rid the business of a cancer.'Firing an employee is both the worst day of your life and the best day,' says Jerry Osteryoung, director of outreach at the Jim Moran Institute at Florida State University's College of Business. 'That's because when you let someone go it affects their family and their livelihood, and it's tough. But it's also the best day of your life because, normally, if you have to fire someone, that person has been a pain in the butt for a while, and it's time for them to go.'In business, however, it's important to make sure that you prepare well before firing an employee and that you follow the law and your own company procedures. The following pages outline steps to lay the groundwork for firing an employee, holding a termination meeting, and following up after termination. How to Fire an Employee: Prepare to Fire an EmployeeThe groundwork for an effective termination of employment should be laid long before the termination decision. 'The biggest mistake people make is they don't prepare for it. They don't work with the employee ahead of time to help the employee succeed so that firing is a last resort. People tend to put up with behavior until they say, 'I'm through,'' says Nancy M. Cooper, chair of the labor and employment group of Garvey Schubert Barer, a law firm based in Portland, Oregon.A firing should never be a surprise. If you have worked with an employee to identify problems, goals, and performance metrics, that employee is going to know whether they measure up or not. 'Once you go through everything and see that the employee is still not meeting expectations, nobody is going to be shocked,' Cooper says.The first step is to make sure you have documented your efforts with the following:The company's employment applicationAn employee handbook describing unacceptable employee behaviorsPolicies describing the company's right to discipline and terminate employeesJob descriptions or other documentations that specify performance expectationsPerformance appraisalsRecords of disciplinary counseling and formal disciplinary actionWritten documentation of the findings of any internal investigation related to the terminationSince these documents will be legally discoverable in the event a former employee sues the company, it is critical they be clearly written, accurate, and do not contain 'inflammatory' statements about the individual.It may be best to con

    • 33 min
    529 College Savings Plan and the Expanded Use, Non-ERISA Plans and the Golden Handcuff

    529 College Savings Plan and the Expanded Use, Non-ERISA Plans and the Golden Handcuff

    On this episode, Charles Musgrove and guest Taylor Hodges from Southern Capital discuss a variety of topics including:The 529 College Savings Plan and how the 2019 SECURE Act has expanded the use of the plan assetsThe Safe Harbor provisionNon-ERISA plans or the Golden Handcuff and practical examplesDistributions from inherited retirement plansBalance of tax deferred vs after tax savings2019 SECURE Act:Small business owners will receive a tax credit for establishing a retirement planAdditional tax credit for adopting auto enrollmentNew provisions to allow part-time employees with less than $1,000-hours to join 401KElimination of stretch provisions for beneficiariesWith a few exceptions, most non-spouse beneficiaries will have 10 years to withdrawal 100% from the inherited IRA – No RMDs during 10-year windowWill count as income to beneficiary – Shift assets to tax-free?RMD age pushed back to age 72Only for people who turn 70 ½ after January 1, 2020Everyone should check to make sure their beneficiaries are updatedIf beneficiary is a Trust, understand how it may effect beneficiary amounts and taxes on distributions Executive BenefitsGoal for business owners is to attract, retain and reward good employeesERISA – 401K, SEP, ESOPNon-ERISA – NQDC, Phantom Stock, Golden HandcuffDifferent for 8(a) companies due to program restrictions on income and net worthSpecialize in 8(a) – Unique planning process ArticlesThe Hierarchy Of Tax-Preferenced Savings Vehicles For High-Income Earners:https://www.kitces.com/blog/hierarchy-tax-preference-savings-vehicle-roth-high-income/Tax Brackets Resource:https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/2019 SECURE Act:https://www.kitces.com/blog/secure-act-2019-stretch-ira-rmd-effective-date-mep-auto-enrollment/Don't Die Yet: New U.S. Law Will Muddle Estate Plans:https://www.kitces.com/blog/tax-rate-equilibrium-for-retirement-taxable-income-liquidations-rothconversions/ 

    • 33 min
    401K, SEP, IRA, SIMPLE and much more - Retirement Plans 101

    401K, SEP, IRA, SIMPLE and much more - Retirement Plans 101

    In this episode, Charles Musgrove and guest Taylor Hodges with Southern Capital discuss the different types of retirement plans. From the simple to the complex, the plans offer a variety of options relating to participation, amount of contributions, access to the cash prior to retirement and many more. The 2019 SECURE Act is also discussed about how it impacts the Retirement Plans. Highlights of the types of Retirement Plans:Solo 401K - $19,500 / $6,500 catchup + up to 25% of business income for matchingMax is $57,000 total contribution + $6,500 for employee catchupCan be used for spouse in business to double contribution amountsRoth option available, solo 401K usually more expensive to setup and maintainSEP IRA – 25% of income up to $57,000/yr.Matching contribution for all employees – very importantLLC is based on net income / S-Corp is based on salaryUsually inexpensive to setup and contributions are made by the employer onlySIMPLE IRA (Saving Incentive Match Plan for Employees) - $13,500 / $3,000Usually requires employer contribution or matchUsually two-year hold on the account for rollover and higher penalty for early withdrawal (25% instead of 10%)Less expensive to setup and maintain than 401K401K - $19,500 / $6,500 for 2020Multiple features and contribution structuresMust understand plan testing – cannot discriminateOwners and key employees cannot own 60% of plan assetsOwns 5%/ owns 1% and makes $150k +/ officer making $175k +Must be fixed in calendar yearSafe Harbor Provision – employer matching for employees and allows employer to avoid plan testing3 matching options:Non-elective – 3% flatBasic Match – 100% of first 3% / 50% of next 2%Enhanced Match – 100% of first 4%2020 IRA and Roth IRA contribution limits: $6k / $1K catchupIncome phase out for IRA deduction: single $65k-$75k / $196k-$206k MFJIncome phase out for Roth IRA: single $124k-$139k / $196k-$206k MFJArticlesThe Hierarchy Of Tax-Preferenced Savings Vehicles For High-Income Earners:https://www.kitces.com/blog/hierarchy-tax-preference-savings-vehicle-roth-high-income/Tax Brackets Resource:https://www.nerdwallet.com/blog/taxes/federal-income-tax-brackets/2019 SECURE Act:https://www.kitces.com/blog/secure-act-2019-stretch-ira-rmd-effective-date-mep-auto-enrollment/Don't Die Yet: New U.S. Law Will Muddle Estate Plans:https://www.kitces.com/blog/tax-rate-equilibrium-for-retirement-taxable-income-liquidations-rothconversions/

    • 31 min
    $15 Minimum Wage in Florida? What are the chances it becomes law in Florida? What's the Impact?

    $15 Minimum Wage in Florida? What are the chances it becomes law in Florida? What's the Impact?

    In this episode, host Charles Musgrove discusses the $15 minimum wage ballot initiative with the Samantha Padgett, General Council with the Florida Restaurant and Lodging Association. We talk about the status of this option being included on the November 2020 ballot, the potential impact to the hospitality industry in Florida if it passes and many more factors around this topic that will surely become more hotly debated as the November election date approaches. To provide some context to the subject, below is a recent article published by the Wall Street Journal.Small Business and the Fight for $15A new study shows how a rising minimum wage hurts little companies.By The Editorial BoardDec. 15, 2019 4:17 pm ETHere’s another volley in the debate over the “Fight for $15”: As the federal minimum wage rose from 1989-2013, small businesses in affected states suffered “lower bank credit, higher loan defaults, lower employment, a lower entry and a higher exit rate.”That’s according to a study last week from the National Bureau of Economic Research. The analysis by three professors at the Georgia Institute of Technology exploits the fact that many states—now more than half—set their own minimum wages higher than the federal standard. This provides a natural control group. When the nationwide minimum goes up, how do the states where it applies fare in comparison?Start with data on one million loans, averaging around $100,000, made through the Small Business Administration. For each $1 increase in the minimum wage, the authors estimate that loan amounts dropped 9% more in the affected states. The risk of default was 12% higher. The average credit score for small companies in those states showed “a sharp decline.” Business entries fell 4% in the year the minimum wage went up. A year later, business exits rose 5%.These results, the authors say, hold throughout various statistical analyses, such as while controlling for local economic conditions. The effects are stronger in businesses like restaurants and retail, which rely on low-skilled labor. Smaller and younger companies are more severely affected as well. In short, the authors conclude: “We find that increases in the federal minimum wage worsen the financial health of small businesses in the affected states.”By now some readers are probably thinking: Well, duh. It does not take a University of Chicago Ph.D. to suspect that raising the price of labor will make it harder to sustain a small, labor-intensive business. Don’t forget that there’s no cost-of-living adjustment: A $15-an-hour federal minimum wage would apply equally to a French bistro in Manhattan and a pizza joint outside Manhattan, Kan.Many progressives still insist this is a free lunch, and most of the Democratic presidential candidates support raising the federal minimum wage to $15. That includes the so-called moderates, like Amy Klobuchar and Mike Bloomberg. They ignore the millions of small businesses that are trying to make payroll and grow.The churn of companies with fewer than 10 employees, this study says, accounts for “more than 70% of job gains and losses in 2018.” No matter what politicians say, inhibiting that dynamism hurts the smallest businesses and the least-skilled workers the most. 

    • 33 min

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