Tag: Finance

Should I raise my deductible to beat an insurance increase in price?

How does my deductible have an effect on my policy?

Many people each day, all around the world buy insurance. Most people use an agent or go direct to the insurance company, but never really ask about that thing called a deductible. Now this is going to aim more towards property and casualty insurance (auto, home, etc), but the point is I want to let you know how this part of your policy works.

When you get into a car accident, the coverage payout will depend on if your at-fault or not. When you are not at -fault, you will go after the other parties insurance for damages, but what if it is your fault? What if you hit another car or an object, who fixes your car then? That is where a deductible comes in. Now deductibles can vary based on how your insurance contract is laid out, but we will stick to $500 deductibles since it is the average.

Lets say for example you hit a tree and your car is damaged. You can’t sue the tree or go after it’s insurance, you need your car fixed. This is where your deductible will come in, you will pay out your $500 and the insurance will pick up the rest of the tab. In this case you are also known as the co-insurer.

When I was working in insurance, one thing that irked me was people raising their deductibles just to beat their price increase. This is never ideal for two reasons, 1. you won’t beat the price increase and 2. you lose insurance coverage. Number 2 is the most important part of your policy. When you use your deductible a contingency is your damages surpass your deductible in order to get coverage. For example, if you have a scratch on your car from some falling debris maybe from a truck on the freeway, you can report that to your insurance company. Your insurance company will have an estimate done by a body shop. Now if the damages are lower than $500 (lets say the estimate was $300), your claim will be denied. You won’t need the insurance to pay anything, why would you pay $500 to get $300 out of the insurance company, right?

Now if the damages in that same situation was $600, then you will be able to use your insurance. You pay $500 and the insurance company would pay the remaining $100. Now imagine if you raise your insurance up to $1,000 and you have the same situation where the damage was $600. Well my friend, you will be paying $600 out of pocket. $600 is less than $1,000.

In conclusion, raising your deductible is not always the answer to your policy increase. Now it’s your policy and the agent is happy to keep you as a client, but just be cautious about what your doing.

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8 summertime to-dos for tax practices

I think business owners including tax Practitioners should always stay busy no matter the season. Everyone wants more money, but wants to skedaddle off to Disneyland as soon as it’s July 1 12:00am. I found a post from Roger Russell that has some great tips.

“April 15 is past, and September 15 and October 15 are comfortably far ahead, which means there are no immediate deadlines for tax practitioners to pay attention to – leaving them, perhaps, with some time on their hands.

While a long, slow summer of leaving early and closing on Fridays may sound nice, it’s probably wise to devote at least some of that downtime to fine-tune some aspects of your practice.

Stephen Mankowski, owner of Mankowski Associates CPA LLC and immediate past president of the National Conference of CPA Practitioners, has put together a list of the primary objectives that many of NCCPAP’s members — including himself — aim to address at this time of year.

1. Continuing education

Rather than wait until the end of the year or the end of the reporting period, now is a good time for all staff members — not just owners — to catch up on their requirements, and to fill in any gaps in their knowledge or improve any areas of weakness.

2. Firm operations

Monkey Business Images Smart firms hold staff meetings to assess and review the prior tax season to prepare for the next, and to determine their off-season game plan. In particularly, they review their staffing levels to see if they had enough staff during busy season, and if they have enough for the balance of the year.

3. Technology: Hardware

Fotolia Tax practices should check their servers — reviewing the systems and performing any needed updates (and possibly consider going to the cloud — see No. 5).

They should also review the performance of their desktop and laptop computers to see if they performed as expected, and if any need to be replaced. Finally, from a hardware perspective, firms should consider how many monitors staff are working with — two is rapidly becoming industry-standard, and some are moving to three, or even more.

4. Technology: Software

Now is a good time to perform needed program and system upgrades and updates, and to check on the firm’s level of cybersecurity.

Perhaps most important, firms should evaluate their tax software in terms of performance, price, support, security and more; vendors are ready to offer demos (and possibly discounts) to those who are considering a switch to a new tax software provider.

5. Consider the cloud

For those practices that haven’t made the shift to cloud-based systems and software, now is a good time to give it some thought.

Among the pros, according to Mankowski, are added data security; the ability to access data and systems from any place with an internet connection; automatic updates; potential savings from not having to buy a server or manage the firm’s IT; and automatic data backups.

Among the cons that he identified are the need to have an internet connection to access data; the relative quality of the practice’s internet connection; the speed on any given device; and the nature of the expense.

6. The office

Bloomberg News With fluctuating staff levels from busy season to the off season, it’s worth looking at whether the practice is utilizing its space effectively. Is there enough space during busy season without excess during the slow season?

7. Extensions

Due dates won’t stay comfortably far away forever, so it’s best to stay on top of extensions to avoid a time crunch come September and October. Keep an eye on outstanding source documents and other information you need from clients, and begin sketching out how you’ll manage the work that’s coming.

8. Recharge the batteries

PaulMaguire It’s not all about housekeeping and improvements to practice: Practitioners should also play lots of golf (or pursue whatever other healthy pastime works for them), take much-needed vacations, and spend time with family and friends.”

Original post from: https://www.accountingtoday.com/list/8-summertime-to-dos-for-tax-practices