Gleanings from Oats bin

Where's My Federal Refund?

Where's My State Refund?

The information provided below is a starting point.  Please contact any one of our offices and we will be glad to further assist you in the best solutions for YOUR business!

 FORMS OF BUSINESS:

 If you are forming a small business, you face several choices: Sole Proprietorship, Partnership, C-Corporation, S-Corporation, Limited Liability Partnership (LLP) and Limited Liability Corporation (LLC).

 What to consider in decision process.

 Small businesses typically decide against a C-Corporation because of double taxation. The C-Corporation pays tax when it files its federal corporate tax return. A second layer of tax is imposed when the corporation profits are distributed to the shareholders as dividends. Overall the C-Corporation is far from ideal for small businesses for tax reasons.  However, the C-Corporation does have some tax advantages over other forms of business for the small closely held business and the overall aspect needs to be considered before a tax decision is made. Amount of projected taxable income and need to retain earnings also enter into this decision.  This is where it pays to consult with a CPA firm that can work with you in making this decision.

Doing business as a sole proprietor eliminates the double taxation. However as a sole proprietor you lack the legal protection that corporate status provides.

Partnerships, LLPs, S-Corporations and LLCs are all pass thru entities.  This is to say they basically pay no income tax and all income, for tax purposes, is passed thru to the owners.

Partnerships and LLPs require two or more partners. The LLP offers more limited liability that a regular partnership. If you had either entity with only two partners and one died, serious problems that might even cause the business to close could result.

 A LLC or S-Corporate. which is more appropriate for your business? Both offer limited liability. When choosing between these two entities you need to consider many issues.  What may be appropriate under one set of circumstances may not be in another.

 This is a brief outline on the question. Because of the many tax issues and consequences involved is it our recommendation that a CPA, with major tax experience, be consulted prior to making such a decision.     

REASONABLE COMPENSATION

The question of reasonable compensation is still an issue with the Internal Revenue Service.  It can be either too high or too low depending on the facts and circumstances of each case.  Planned consideration is needed to set same in a valid range.  We at CSOAC are very willing to discuss and plan same with you.

HOME OFFICE DEDUCTION

The rules have changed considerably over the years.  There are still issues to be decided regarding same on your tax returns.  Give us a call to set a meeting to discuss same.

SHAREHOLDERS LOANS

Loans between shareholders and closely held corporations are subject to special tax scrutiny, and if not properly documented can produce adverse tax consequences.  We will gladly discuss, and review your situation and documents with you.

EDUCATION COSTS

The tax laws now offer many forms of help for financing education costs

Give us a call to discuss your various options.

 ESTATE PLANNING

 The tax laws are changing regarding estate taxes.  However, to do nothing is not really an option.  There are still tax issues in estates.  There are also many reasons besides taxation to be sure your estate is properly set-up, and handled in according with your desires. Give us a call for a free conference to discuss these issues and what you may need to be doing with your estate.   Click here for more info.

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Last modified: 05/14/08