Legal Updates & Commentary for Tax & Estate Planning
You may recall how clear it became, as the bill that would become the Tax Cuts and Jobs Act (“TCJA”)[i] moved through Congress in late 2017, that C corporations were about to realize a number of tax benefits, the most significant being the introduction of a flat federal corporate income tax rate…
Our society is fortunate that so many business owners are charitably inclined.
In many cases, their charitable activities are motivated purely by a desire to help others, whether the object of their assistance is a favorite social welfare agency, museum, school or university, religious institution, hospital, scientific research organization, or you name it.…
A business entity that is treated as a “flow-through” for income tax purposes enjoys the benefit of a single level of tax – the entity itself is typically not subject to tax on its net income; rather, that income “flows through” to the entity’s owners, who then report it on their own income tax returns. This flow-through treatment occurs whether or not the entity has made a distribution to its owners. For that reason, partnership/LLC agreements and “S” corporation shareholder agreements often provide for so-called “tax distributions,” meaning that the entity will distribute, on an annual or quarterly basis, enough cash to enable its owners to satisfy their income tax liabilities attributable to their share of the entity’s income that is flowed-through to them.
Continue Reading When Investing In A Partnership May Be A Tax Problem
According to statistical data released by the IRS earlier this year, the examination rate for partnership tax returns has been increasing significantly over the last couple of years; of course, this includes returns filed by LLCs that are treated as partnerships for Federal income tax purposes. This should come as no surprise given the significant…
In general, self-employed individuals are subject to employment taxes on their net earnings from self-employment.
The wages paid to individuals who are non-owner-employees of a business are subject to employment taxes regardless of how the business is organized.
The shareholders of a corporation are not subject to employment taxes in…
