Business planning and estate planning often go hand in hand. Businesses started by parents are frequently passed down to their children, and in the absence of adequate forethought, the new relationships that are formed can quickly disintegrate, causing damage to both the siblings’ personal bond and to the business.
C corporations are often the best planning option for business entities. However, fears of the dreaded “double-taxation” may lead some to reject C corps without a closer look. But double taxation can be reduced, and in some cases avoided, making it an option worth considering. Attorneys seeking to maximize tax savings for their clients should investigate whether C corps are a good option for their estate planning. Simply put, double taxation means that the C corp is taxed on its income at the corporate level, and then its shareholders are taxed on the same income when it is distributed to them in the form of dividends. Understandably, this is a situation most want to avoid or minimize.
As we discussed in our last couple posts, there are numerous books about better ways to think about your role in your business, and time-saving applications that may be a huge boon to your work.
But still other business owners may want a reliable reference–where to go for insights on specific topics as they arise.
In our first post, we talked about business owners who may feel overwhelmed by the business of running a business, and we suggested a couple books to help them reframing their thinking about small business ownership.
But now let’s turn to a couple technological solutions that are surprisingly easy to use, but may streamline their day-to-day, from an operational perspective.
As attorneys, we’ve heard many reasons why people start a business. People start businesses because they have an idea they’re passionate about. They see a need, and they know how to fill it.
If there was ever any doubt, the U.S. Tax Court has clarified that the sole member of a single member LLC can, in certain circumstances, be held liable for the employment tax liability of the entity. In Heber E. Costello, LLC and Costello v. Comm’r, T.C. Memo. 2016-184 (Sept. 29, 2016), Scott Costello, the sole member of Heber E. Costello, LLC, a Louisiana LLC, disputed his responsibility for the unpaid employment taxes of the LLC. Costello contended that the LLC should be treated as a corporation since (1) it resulted from a reorganization under Code §368(a)(1)(F), and (2) he filed corporate tax returns (Form 1120) for the LLC, which he claimed constituted a valid election for the LLC to be taxed as a corporation.