Mind your Business 2017_11

Again, let’s discuss Tax Reform and then I will tell you ways to help your business the rest of this year. As a former corporate counsel and former IRS attorney, I can be your one-stop professional. I can draft your contracts and advise you on their tax consequences. Right now, I am working on business purchase contracts for clients.
I am forming LLC’s and telling clients why not to form an LLC. Purchases and sales of businesses or equipment should be carefully planned to avoid unfavorable tax and legal consequences. Find out more.

TAX REFORM. Under Tax Reform, most likely in 2018 there will be a 25% maximum tax rate on sole proprietorships, partnerships, and S corporations. There is a chance of an unlimited deduction for depreciable assets other than buildings effective in September of 2017. If you have this option, you will have to decide if you are better off deducting it now or later. It will be wise to get a professional tax forecast so you will know your effective tax brackets this year and in the future.

Purchase or Sale of Business or Equipment. If you ell equipment and you have written off all of its cost, you will have tax consequences. Think about instead making a tax-free exchange. Or you could delay the tax with an installment sale. If you are buying or selling a business, I could easily write a book on it. Think about noncompetition provisions, non-solicitation provisions, confidentiality, warranties and more.

YEAR-END PLANNING. Check with your tax professional and do some year-end planning. If you are a cash basis taxpayer and will be in an equal or larger tax bracket this year than 2018, pay some of your 2018 expenses, like insurance premiums, this year. Delay some billing.

WILL YOU BE AUDITED? What are your chances of getting audited? My TaxMastery© program tells you the average deductions for taxpayers in your income range. The IRS has announced that it is an audit red flag when taxpayers have lots of wage income but report lots of Schedule C losses especially if the loss activity sounds like a hobby. A recent Tax Court disallowed losses from film festival marketing where the taxpayer had no business plan and poor records.
My advice: act like a business if you want to be treated as one for tax purposes.

Give me a call. Get a free 1/2 consultation.

About Wis Laughlin

I help clients with tax preparation and IRS representation, estate planning, and complex contracts, including LLC's. As a former IRS tax attorney in their National Office. Law.com picked Wis in 2017 and several prior years as one of the Top Tax and Estate Lawyers in Tennessee. I am your advocate, not your accountant. I don't tell you what you can't do. I show you how to do it.
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