Estates, Trusts and Administration
By Todd A. Stewart, Founding Partner On May 20, 2019, I was in a program with author Kevin W. McCarthy where he talked about his book, Chief Leadership Officer: Increasing Wealth So Everyone Profits. Many good takeaways and I particularly like the idea of aligning your three bottom lines: Financial, People and Purpose. If you want more information, the website is: http://chiefleadershipofficer.com/. *Intended as general guidance only and not as legal advice.
Saving self-employment (SE) tax on the business earnings of a partner or sole proprietor can be significant, with rates from 2.9% to 15.3%. Partners in some cases have avoided this SE tax on their distributive share for an interest as a limited partner in a limited partnership (LP). Today, however, LLCs are in much more common use than LPs for business and investment purposes. This makes it unfortunate that it’s still not clear that a passive member of an LLC can avoid the SE tax. Recently though, the Tax Court allowed limited partner treatment to a passive member of an […]
Here’s an idea that can be very powerful for some business owners. The 2017 Tax Act provides business owners with a 20% deduction on their business profits (Qualified Business Income or QBI). The catch is that the 20% is applied to taxable income if that’s lower. In other words, if taxable income is going to be lower than QBI, then you miss the opportunity to have some income that will receive a 20% deduction. Therefore, if you accelerate income, some of the cost of doing so will be eliminated by the increase you are creating with a larger QBI deduction. […]
By now, you’ve likely heard that certain businesses can qualify for a 20% income deduction under the new tax law. This is true for an “active trade or business.” Earlier this year the IRS issued a proposed safe harbor setting out how rental real estate activities can qualify as an active trade or business for the 20% business deduction. By safe harbor, we mean rules that should work, but taxpayers can still use case law to show their activities qualify as an active trade or business. In other words, this safe harbor can allow you to reduce the effective rate […]
Deferring taxable income to a later year is often an effective strategy for paying less in income taxes and keeping more of your wealth working for you. For example, if you are organized as an S Corporation or Partnership for income tax purposes and anticipate being in the same or a higher tax bracket in 2018 than in 2019, then you may benefit from deferring income into 2019. Here are four ways you might achieve this: (1) Cash Method of Accounting The Tax Cuts and Jobs Act (TCJA) expanded the number of businesses that can use the cash method of […]
The end of year is a busy time for many reasons. Travel plans, holiday hosting, and family visits tend to keep your calendar packed. But as a small business owner you have additional obligations that need to be addressed. The end of year is a perfect time to assess your current business, make some decisions, and set some overall goals to ensure you start the New Year off right. When 2019 rolls around be sure you took the time to self-assess with this Checklist: ( ) December is not too late to make a number of moves that can lower […]