Lightning Protection

 

When Unreimbursed Losses May Result in Tax Deductions
Have you suffered a business property loss in a disaster? Did the destruction result in unreimbursed loss? If so, there’s good news. When tax season rolls around, you may be able to recoup some of this loss.

Under the U.S. tax code, unreimbursed property losses can be included in itemized deductions. So if a storm or vandal destroyed your truck or fire damaged your store, you may qualify for a deduction. If the loss is not completely covered by your insurance, it may be possible to deduct some of it on your federal income tax return.

Of course, various stipulations apply. Seek assistance for proper claims and deductions from your tax preparer. Generally, losses must be substantial to qualify. If an unreimbursed loss exceeds 10 percent of your gross income, it can usually be deducted. Different rules apply depending on whether the property is for business or personal use, so check with a professional to ensure that your filing adheres to proper regulations.

The year the deductions apply to may also vary. If your region has been declared a federal disaster area, you can file the deduction for the year in which the disaster occurred or the preceding year.

Whatever the situation, it’s essential to prepare documentation to support your deduction. You should collect all receipts, police reports, insurance claims, statements, and any other records involved. Keep these in an organized file for reference. This is a good practice to develop, even if you don’t think you qualify for a deduction. You never know.

HOT BIZ TRENDS
2016: The Year You Step Outside Your World to Learn
Outside Wworld

It seems many a savvy entrepreneur will look to other industries for ideas and solutions in 2016. It’s time to “step outside your world.”

Or so says Paul Charron, former board chair of Campbell Soup Company, in an address to real estate agents. As he suggests, most of us suffer from tunnel vision, believing that our issues are unique to our industry. In fact, barriers and opportunities are often very similar in very different business sectors. Leaders need to look at those companies outside their industries who have faced similar challenges-and found a solution.

For example, says Charron, everyone is concerned about getting closer to the consumer. But successful companies may have already found the way. Look at how they do it and envision how similar initiatives could bring you closer to your own customers.

When there’s no mechanism in place to look outside for ideas, solutions, and inspiration, it may be time to institutionalize it. As quoted in an RISMedia article, Charron suggests the creation of an advisory board of smart people from other industries: “When you institutionalize external stimulation it guarantees that you’ll get that great idea from outside your world.”

Herminia Ibarra, professor of leadership and learning at global business school INSEAD, agrees. Quoted in a Forbes article, Ibarra suggests that executives should use “outsight”-getting out of their daily routines and into situations that will give them fresh perspective.

The result could be a surprising interaction between advisors and advisees: you learn from them; they learn from you.

FINANCE
Start 2016 Off Right with an Investment Review
investment

Despite market volatility, 2015 was a good year for many investors.

As a result, you may find that the start of a new year is a good time to get together with your financial advisor to review your investments and make any necessary changes.

Here are five questions to ask your advisor to help you start 2016 off right:

  1. How can I make capital gains long term? The tax rate on long-term capital gains is lower than the tax rate on short-term capital gains, so your advisor may suggest you wait until you’ve held certain appreciated investments for a year before selling them.
  2. Should I own more stocks? Stocks have more appreciation potential than bonds, but there are a variety of risks associated with investing in them; your advisor, who knows your situation, can help you decide if you can tolerate these risks before making an investment decision.
  3. Should I contribute more to tax-deferred accounts? If you’re not yet retired, tax-deferred savings accounts are a great way to keep your assets growing tax free, potentially compounding their value year after year. Ask your advisor how best to participate; for example, by increasing your contributions to a company-sponsored retirement plan, a SEP IRA, a traditional IRA, or a Roth IRA.
  4. Would giving the gift of stock or mutual fund shares benefit me?If your portfolio has appreciated and you don’t need the money, your advisor can explain some options. For example, you may want to consider gifting appreciated assets to charitable organizations, your children, or your grandchildren.
  5. Am I subject to the alternative minimum tax (AMT)? The AMT applies to all people who take relatively large deductions, including deductions for state and local taxes. Ask your advisor if you are subject to it, and if so, he or she can help you plan ahead during the year to minimize your exposure.
INSURANCE
Protect Your Bottom Line When Lightning Strikes
Lightning may never strike twice in the same place, but it only has to strike your business once to create disaster through fire damage and equipment failure. With today’s heavy reliance on technological equipment to run businesses, it is essential that business owners protect both the physical structures of their businesses and the electronics that control them.

The 100,000 volts of electricity that a lightning bolt can deliver is easily capable of destroying the costly electrical equipment you rely on for your operations. It doesn’t even have to strike your building. Lightning can travel up to three miles (4.8 km) through the ground and affect your systems. Resulting power surges can send up to 1,000 volts into lines designed to handle only 120 volts. The consequences are overloaded circuitry, lost data, and destroyed equipment. Power strips and electrical panels may even catch fire and spread further damage.

The end results of a lightning strike are lost income and costly expenses for your business. So how can you protect your business from lightning?

Insurance – Get the proper coverage for your business needs. Check with your insurance agent about the policy options available and which will be best for your business. Here are some suggestions:

  • Business insurance – Standard business insurance policies cover damage caused by lightning. Some policies also provide coverage for power surges caused by lightning.
  • Power surge insurance – That said, additional coverage is typically required for damage caused by power surges not related to lightning-a good investment.
  • Equipment breakdown insurance – Specialized insurance policies, such as equipment breakdown insurance, can add protection to cover the cost of replacing expensive electronics.
  • Insurance limits – Check with your insurance agent to find out what policies and coverage limits your business needs in order to thoroughly protect your investments. Specialized and costly equipment may need additional rider coverage to properly insure it against lightning damage.

Precautions – In addition to insurance, business owners can take some fairly simple precautions to protect their assets against lightning damage. While some cost is involved, it is minimal compared to the damage lightning can cause.

  • Lightning protection system – This includes a lightning rod or air terminals at the top of the building and wires that carry the current to grounding rods at the bottom of the building. When lightning strikes a building with a protection system in place, the strike is directed into the ground, protecting the building and its contents from damage. To ensure proper installation, hire a licensed electrician to install a lightning protection system for your business.
  • Surge protectors – Power strips do little to protect your equipment from power surges. For proper protection, business owners should use UL-listed surge arrestors. These are installed on electrical panels and incoming data and phone lines. Arresters prevent electrical fires and damaging electrical discharges. They can also be installed on specific pieces of equipment.
  • Power removal – If a storm is approaching, unplug equipment. A few minutes of down time may be well worth it if it saves all your equipment from ruin.
March 17th, 2016 by Lightship Insurance