Overcoming the Urban Myth about Social Security Disability Benefits

Do you worry that if you go to work to earn additional income that your Social Security (SSA) disability benefit will be stopped?

 If you go to work while receiving SSA disability benefits will your medical coverage stop?

 What happens when you reach retirement age?

 What is “Ticket to Work?

 Have you discussed your concerns with others who receive SSA disability benefits and been told all of your benefits might be lost?

 Do you work and not declare your earnings because you are afraid of what might happen to your SSA disability benefit if you do?

 Well, here is the real story!

 Every SSA disability benefit paid is unique to the person receiving the disability benefit.  If you discuss your worries with someone receiving SSA disability benefits and they tell you their experience, it is not what will happen to you.  Why? Because your SSA disability benefit situation is totally different from theirs in many small but unique ways.

 So how can your find out what your unique situation is?

 Remember, your disability benefit is two parts:  monthly income and medical or health insurance.  Each of these pieces is affected differently when a person receiving disability benefits returns to the work place and earns income.  Earning income allows a person receiving disability benefits to begin the process of becoming self- supporting.  This may mean saving for a home, retirement, education or starting a business.

 Returning to work often means the disability stops being a major daily focus. The individual starts to develop a more rewarding life style. The opportunity to develop the basis for a better retirement is possible, both in savings as well as receiving a higher SSA retirement benefit. 

 If you are receiving SSA disability benefits, or know someone who is, discussing the specific SSA disability benefit may be the game changer for a better life.  Contact your area’s Certified Work Incentive Counselor (CWIC).  These individuals are trained to analyze each individual’s special situation and determine what changes might occur to the SSA disability benefit if that individual returns to work. Because your SSA benefit is protected information, you have to sign a release to work with a CWIC.  Contact your local SSA office to find the CWIC in your county.

 Good Luck!                                                                                       

 Colleen Moynihan  



When should a business be a “not for profit”?

Deciding the legal of form of a business requires understanding the long term intent of both the owner and the business. A common key intent is the desire to pass a business to one’s heirs. This usually rules out the use of nonprofit status for a business as the nonprofit form of organization is not inheritable.

So, why would an entrepreneur select the legal form of not for profit for the business?
Read how one business decided that being a nonprofit fit the services offered.

The mission of the organization is to provide information and support to both care takers of and individuals stricken with Lyme Tick Disease. This “business” provides support programs and links to resources to these individuals at no cost. Individuals with Lyme Tick Disease are situated across the United States and often lack access to information or support. The resource center, which is how the business defines itself, must be able to provide free assistance and yet still pay its operating costs.

As a nonprofit this “business” qualifies for financial assistance through tax deductible donations and grants from foundations and other sources. It does not pay any taxes on the monies it receives. It is only as an IRS certified entity that tax favored status can be attained. An organization must request tax exempt status and be approved by the state in which they are incorporated and the Federal Government. The assistance of a qualified attorney is recommended to complete these two applications. The cost to complete and submit the applications can be several hundreds of dollars.

The tax exempt organization must have an identified Board of Directors (BOD) which usually serves with no compensation. The BOD is responsible for the organization’s policies and compliance. They hire and fire staff which is responsible for the day to day running of the operation as determined by BOD policies and goals. This includes the Executive Director or CEO of the organization. Staff are paid and receive benefits similar to those provided by a for profit business.

The Executive Director is the chief operating officer of the nonprofit. Even though defined as a “not for profit” this business form is still a business and must conduct their operations within the rule of law. These entities can have annual excess revenue which can be held in reserve for future use. A not for profit can conduct fund raising campaigns to cover certain operating costs or building programs. These types of “businesses” must file an annual report to the state of incorporation each year and the IRS.

When the Executive Director of the resource center leave, retires or dies, even though they were responsible for creating this “business”, they can make no claims as to ownership.

Much of what has been discussed may not apply to other forms of nonprofits, such as family foundations. Contact an attorney or accountant specializing in non/not for profit business support for a more in depth or detailed discussion of the forms of nonprofit businesses.

In 2013 we explored the legal forms of business available to a business owner. For more information contact a qualified attorney. CMoynihan , 2013

When does a business need investors?


Some would say, “as soon as the business is created!”  For many startup businesses this may be true.  All businesses face the need for money.  Unfortunately for a new business, cash from others is not always available.  Most lenders require the business be in operation for a year or two.  The bank wants to see tax returns for two years of revenue before lending money. Unless there is some spectacular innovation or opportunity, investors and lenders usually steer clear of startup initiatives.  The owner’s family and friends, as well as personal credit cards, are often the usual source of cash.


Some businesses have seasonal revenue flow. Cash is not as available in some months of the year but it is more steady or available at other times of the year.  This seasonal down turn in revenues must be managed by setting aside monies during the revenue rich months to cover operating costs in low revenue months.  A seasonal business must monitor business purchases to assure there is adequate revenue to pay for the purchases.


Many seasonal businesses use a line of credit with their banker to cushion or off set the low revenue months. Obtaining a line of credit gives a business access to cash when needed up to a certain amount without having to go through a loan review every time money is needed. 


There is an initial qualifying process to obtain a line of credit, but once approved and the business follows the pay back guidelines, a business can rely on that line of credit from year to year to provide needed cash.  A business can also increase the line of credit as the business grows and shows its ability to pay back the increased line of credit.  Not all banks provide this service.


A growing business often needs additional cash to meet the demands of increased levels of operating costs.  The revenue from the growth may not be available as quickly as the need to pay for operating costs.  Raw materials are purchased to manufacture increased levels of product.  Staff  is  hired to administer additional processes or services.  The physical plant needs to be expanded to accommodate increased production or inventory space.  This is when a loan is a way to finance the increased growth.  The terms of the loan; interest rate, length or term of the payback period and amount of money borrowed, all play a role in the owner’s ability to obtain a loan.  Collateral is often required by the lender as protection for the loan.


None of the money transactions discussed above creates business investors.  In today’s business climate an investor may be interested in obtaining a percent of ownership, a per cent of the profit, some right to the product or service or a combination of all of these.


If a business is a corporation with stock, the owners are considered first investors.  This same corporation can recruit other individuals to invest in the business.  These new investors may have no involvement with the running of the business or the investment does bring the opportunity to have a say in the running of the business. Either way there are now additional stock holders with rights that should be stated in the minutes of a business meeting.


As a business becomes more successful, has larger market share, gains a national or international presence, it might consider being listed on a stock exchange or NASDAQ.  This step requires compliance with Security and Exchange guidelines and the use of a qualified attorney.   The investors are potentially from around the globe.  The company’s stock is measured by dollar multiples.


When is an investor needed?  When the business owner decides to seek financial assistance from beyond the traditional banking resources an investor relationship is usually created.


Today’s cyber world has created a new way for a business to obtain financial support.  Gaining acceptance on a Kickstart model website a business obtains financial support from individuals from around the world for a few dollars per interested person.  This is the new definition of “investor”.

C Moynihan            10/2013

What is the Value of my Business Share?

Another Business “safe harbor”

Another Business “Safe Harbor”                                                                   

 The last several blogs have focused on how a business owner protects personal assets from business liability impact.  The conversation continues. As always, a business owner should seek the advice of an attorney in the state in which the business is located to assure the most appropriate legal business form is selected.

 Most business owners select the sole proprietor form of business because it eliminates a layer of taxation on revenue generated by the business.  This business form is simple to understand, flexible and usually gives the business owner(s) full control of all business decisions.  However, there is no protection from direct business liability for personal assets.  This holds true for partnerships as well.

 The May Blog reviewed the benefits of a Limited Liability Corporation (LLC) which provides protection for personal assets and maintains pass through taxation for the business owner(s). This business form allows the business owner(s) to retain full control of business decisions and equity based on per cent of ownership. The owners of a LLC are called members and own a stated percent/portion of the business.  As a business form it is gaining wide spread use in the business community given its flexibility to work like a sole proprietor or partnership.

 Another legal business form that allows the business owner to enjoy some of the benefits of sole proprietorship and liability shelter is the Sub Chapter S Corporation.  This business form provides pass through taxation to the business owner and removes business liability for personal assets. 

 A S Corporation can have up to 100 shareholders and still benefit from pass through taxation on dividends and income. These shareholders are called the owners of the company. To enjoy these benefits the following IRS requirements must be met:

  • It is a domestic corporation chartered in the state  of organization
  • There are no more than 100 eligible shareholders, all must be US citizens
  • Only eligible shareholders participate in the distribution, no corporate shareholders
  • There is only one class of stock

The law requires regular shareholder meetings, a Board of Directors and defined upper level management with a CEO and CFO.

 The S Corporation is a separate legal identity from its owners.  The LLC is less concrete than a corporation and exists only as long as its members participate.  If a LLC member dies or files for bankruptcy the LLC dissolves.  This is not true for an S Corp.

 This review is concerned with the general features of the S Corporation as compared with being a sole proprietor. There are other Sub S features related to type of income earned and retained earnings limits that must be addressed by an Accountant or Attorney. 


Compliance with IRS guidelines for any form of business is a requirement of doing business.


June, 2013       Colleen Moynihan

Protecting Assets from Business Liability

Protecting Personal Assets from Business Liability


It’s time to discuss business liability.  The conversation up to now has been on the general consequences of operating as a sole proprietor or a partnership. 


A constant concern for a business owner is the impact of a formal complaint or lawsuit. Being self-employed may put a business owner in a precarious position in terms of protecting personal property.  In a self-employed (including partnership) situation all revenue and obligations flow directly to the self-employed business owner. Unless legal steps are taken to protect personal assets from business challenges, personal assets can be encumbered or lost in a liability dispute.


A small business owner can protect personal property from the consequences of liability by becoming a Limited Liability Corporation (LLC) or a regular corporation. The specific formalities of each legal form must be followed to obtain the protection sought for personal assets of a business owner.  To maximize the desired liability protection an attorney and/or accountant should be consulted to determine the best strategy to use for the specific situation.


A LLC provides the most flexibility for a sole proprietor. The use of a LLC allows the business owner to retain the advantages of direct taxation to the owner. This means business revenues are taxed just once. Another way to express the tax process for a sole proprietor or partnership is as a pass-through tax. As a LLC this tax process is intact and personal property is usually cordoned off from exposure to business liabilities.


Many small business owners avoid the incorporation step given the impact of double taxation on revenue, first to the business and then to the business owner.  In a corporation the owner is considered an employee of the corporation. As such, personal property is usually protected from any business liability. The corporation is presumed responsible for any business liabilities.


There are other methods of protecting personal property from business liability.  One way that has nothing to do with the legal form of the business is to have all personal property owned by a person not connected with the business.  This limits claims of business liability to property owned by the business.


Many sole proprietors consider incorporation as the business grows.  A sound business reviews all options annually to ensure the best legal strategies are in place at all times.


(This article is not a complete view of possible tax consequences for each form of incorporation. A tax attorney or accountant should be consulted before any legal business form is determined.)


C Moynihan     May, 2013


Business partnership concerns….

Partnerships- The Devil IS in the details!


You and your friend have been working together off and on as yard maintenance and handyman services.  This “partnership” started in school as a means of getting spending money.  With limited employment opportunities, the two of you have developed some steady customers on an “informal” basis for almost 5 years.  You both own vehicles used for the business.  You each own tools and equipment necessary for the work. 


With growing personal responsibilities comes the need to create steady income. The situation has grown into a business that allows the two of you to work, year round, with a reliable income every week.  Is a partnership, based on yard maintenance and handyman services, the opportunity it seems? 


Individuals in similar situations would see this as the answer and move ahead. The challenge is obtaining more customers. This means marketing your services to a broader audience over a bigger territory.  Up to now customers have been family and friends.


  • How is this to be done?  Who is responsible for selling services? How are the services coordinated? 
  • Who is responsible for the paper work? How are profits divided?  What happens as staff is hired? 
  • Is liability insurance another expense that must be considered? 
  • What happens if one of the partners is injured and unable to work?  Does this person still get paid?
  • What happens if employees are injured?
  • How are income and taxes distributed?
  • What is the role of a spouse or other family members with special skills?


This list is the tip of the iceberg. Many times these questions are not discussed when the partnership starts leaving the answer for when a problem arises.  This is the worst time to develop a solution. The time to seek the advice of a business Attorney is when the business starts or a soon as possible.


The above questions and those related to full disability or death of a partner should be resolved BEFORE a partnership moves forward as a business. Partnership agreements should be in writing, reviewed by an attorney and notarized. The partnership agreement usually sets ownership on a %.   An Accountant assures profit, taxes and other activities are handled appropriately.  Business insurance, always a good idea, is almost mandatory in a partnership situation.  A funded Buy-Sell Agreement is a key document for the partnership to have in place.


Is your partnership agreement in writing and up to date?  An annual review is an important business activity.  Things change. What happens to your family and your share of the business when you die or are disabled?  Are the answers in your partnership agreement?


Contact BDC@neabworks.com for more information.


Colleen Moynihan