Business Consulting Services
At their inception, most businesses operate as a single company. However, while administratively simple, a significant problem with operating under a single-entity structure is that all of the business assets are subject to judgments or lawsuits against the company and business debts. Moreover, from a tax perspective, the primary problem of operating in a single-entity structure is that the owner will only be able to utilize the benefits of the single entity.
For example, an individual that elects his corporation to be taxed as an S corporation will gain the benefits of the S corporation (a single level of taxation and simplicity of operations), but also the disadvantages of the S corporation (inability to utilize all available fringe benefits, application of the individual tax rates to all of the income, etc.). Similarly, if a C corporation is chosen as the entity of choice, the shareholder will be able to utilize additional fringe benefits and gain the advantage of the corporate graduated tax rates, but at the expense of potential double-taxation on income or increased payroll taxes.
Many businesses can optimize the benefits of entity selection by separating their business into more than one entity. Essentially, the goal of a multiple-entity structure is to gain the tax advantages of multiple types of entities, while minimizing or eliminating the tax disadvantages. There are also legal advantages that can be gained as well.
You need to answer the following questions:
When you set up your business did you know the tax cost associated with the entity you chose?
Are you controlling your Social Security Costs and still maximizing your benefits at retirement?
Is it possible in your business structure to have the income taxed to the partner that has the lowest overall tax liability, effectively lowering everyone’s tax liability?
Does your structure allow you to take more cash out of the business than you pay tax on?
Are you nearing retirement and want to maximize your retirement benefits?
Does your business structure consider the big picture, such as other income and/or losses, loss carryovers, itemized deductions, exemptions and other assets?
Does your structure adequately protect your business from financial predators?
Does your structure adequately protect your family?
If you need help with the answers, call or email us. Positioning our clients in the right business structure is a big part of what we do because it has big implications for you.
Business Structure Consulting
Your business structure controls in large part how you can pull cash out of the business. Having options is a huge advantage. For example, we recently had a new client come to us. They came to us with about $250,000 in operating losses that they were carrying forward, with no chance to use those losses against net income in the foreseeable future. We devised a strategy for them to use those losses giving the three partners an immediate tax benefit of about $10,000 each. With that problem solved we then could restructure the business, providing the three owners with additional strategies so they could enjoy significant tax savings on into the future.
Do you need tax strategies to achieve significant tax savings?
Can you afford to leave $10,000.00 on the table?
Ask us How!
Call or email Tax Warrior, Inc. today.
