Corporate Tax Planning
Whether you are a start-up, poised for growth, or a mature business you need business tax planning. It is integral to building a strong foundation for your business. Harmony between business decisions and tax consequences can take your business to the next level. Your corporate tax planning should tie together your business strategies with your personal tax, investment and estate planning goals. Now is the time to ensure that your entity structure is aligned with your profitability, operations, taxability, benefits, risk exposure, and ability to accumulate wealth as owner or executive.
Do you want to keep more profits? A comprehensive assessment of your business deduction strategies may be the key to keeping more profits in your pocket. You should already know that deductible expenses must be: ordinary and necessary for the business, not extravagant, and primarily for the business (not personal). But, what you may not know is that consulting a tax attorney prior to making those decisions may take your small deduction into a fairly large one. Think about it. Would you rather pay the IRS more in taxes or use the money to reinvest in your business?
Do you hire independent contractors? If yes, it is even more important to do your business tax planning. The Wall Street Journal reported that in one six year period, the IRS performed more than 11,000 audits of companies using independent contractors. The results: 483,000 re-classifications of independent contractors to employee status and $751 million in backs taxes and penalties. This means that the average audit resulted in about $68,272 owed by each company. Do you really want to be one of these companies?
Why do I need a tax attorney now?
- business tax incentives – Through 2013, businesses will be able to claim 50% bonus depreciation on capital purchases. Plus, expense Section 179 expenditures (for equipment, office furniture, and other material goods) to a generous $500,000 allowance and a $2 million investment limit.
- Self-employment tax for 2013 of 15.3%
- Obamacare imposed a new 3.8% Medicare tax for 2013 on net investment income (from sources such as interest, dividends, and annuities) for individuals making more than $200,000 (and couples making more than $250,000). Passive income from a business and income derived from trading in financial instruments are both considered investment income.
A small business owner’s business and personal tax concerns are almost always inseparable. These fees, whether business or personal related are always deductible, but different rules apply. It is usually a good idea to get a comprehensive tax evaluation. Remember a tax attorney can provide attorney client privilege which allows you to divulge your entire financial situation.