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Tag Archive for Blake Christian

Is Your Business Still The Right Entity Under The New Tax Rule? (Part 2)

Blake Christian - Choose Business Entity Part 2

More tips about determining the right corporate, partnership or other structure that’s best for your business—and where you are in life.

Key Takeaways:
• The legal structure of your business operations can have a significant impact on your annual income tax and estate planning.
• When you and/or your heirs expect to be at or near the maximum income tax rates, you will generally want to leave appreciated and appreciating assets in the taxable estate, rather than transfer them prior to death.
• In general, assets with the potential to appreciate in value should not be placed into an S or C Corporation.

As many of you know, The Tax Act of 2017 created a host of changes and considerations for successful business owners in their families. There are six widely used business operating structure. In Part 1 {LINK} of this article we discussed Sole Proprietorships (Schedule C), Limited Liability Companies (LLC) and Limited Partnerships. Here will take a closer look at the other three
entities: General Partnerships, Subchapter S Corporations and Subchapter C Corporations.

Read more

Top 10 Tax Provisions You May Not Have Heard In The News

Even though described as “Simplification,” the Ways and Means proposal is 82+ pages long and will likely expand during the markup Even if passed in 2017, the vast majority of changes will not be effective until 2018.

While the tax rate brackets will be simplified from seven to four, higher income taxpayers will occasionally find them in a higher bracket under the proposal than they would under current law. For example, an individual taxpayer with $200,001 to $424,950 in 2018 will jump to a 35% rate vs. 33% under current law. Likewise, a married couple with $260,001 to $424,950 will jump to 35% vs. 33%. Read more

More States Impose Sales Tax On E-Commerce Sales

Over the last few decades, states have had the opportunity to broaden their income and franchise tax base by ensnaring a larger proportion of out-of-state taxpayers in their taxing regime through adoption of broad economic or factor-based economic nexus standards.

However, states have traditionally struggled to do the same with respect to their sales and use tax base because of the long-standing United States Supreme Court nexus decision in Quill Corp. v. North Dakota (1992).” 1 For nearly three decades, the dicta contained in Quill have prevented states from adopting economic-based nexus
standards with respect to sales and use taxes, requiring instead a more stringent physical presence standard (or “substantial nexus”).
The Supreme Court has repeatedly declined to hear challenges or cases related to Quill, until recently. Read more

Olympians May Earn More Than Just A Medal: Tax Implications For PyeongChang Medalists

With the South Korean Winter Olympics just a week away, thousands of athletes are beginning to converge on the PyeongChang region and of participants from around the world are finalizing their physical and mental preparations. 2018 will bring out a projected 2,925 athletes from 92 countries into South Korea.  The 2018 U.S. Olympic Team is comprised of 242 athletes (135 men, 107 women).  For a number of reasons, including snow-deficiencies in the majority of countries (let’s ignore the Jamaican bobsled teams for the moment), the Winter Olympics are just as exciting, but a bit smaller-scale than the Summer Games.  Compared to the 2016 Rio Summer Olympics, the Winter Games will feature about 70% less athletes from less than half as many countries.   Read more

5 Ways The New Tax Law Affects Paying For College

The final version of the GOP tax bill that passed last month rewrites the tax code in many ways, eliminating deductions and adding new benefits. Some of these new provisions affect those paying for college. The final version of the GOP tax bill that passed last month rewrites the tax code in many ways, eliminating deductions and adding new benefits. Some of these new provisions affect those paying for college. Read more

Lottery Winners Tax Strategies – Lump Sum vs. Installments

TaxConnections Picture - Lottery BallsThe most frequently asked questions from lottery winners and those who just dream about being a lottery winner is:

“Should I take a lump-sum or installments?”

Take the installments!

 

Despite everyone telling you to take the lump-sum. Your heirs will receive the balance if you die before collecting all the payments and at least 65% of your lump-sum amount will be gone within the first year due to discounting and taxes.

A lump-sum winning will typically get reduced by 45% or more for the time value of money (acceleration by 20 plus years) and then the net amount is further reduced by approximately 35% or more for taxes — leaving a net amount of 35% or less of the gross winnings.

Installment collections will generally only be subjected to the federal tax hit (depending on state rules) and the taxes are paid over the collection period. In effect, each payment includes a layer of interest earning and once the amounts are received, the recipient is free to make their own investment decision on those funds. Read more

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