When starting a business, one must decide what form they want their business entity to establish. This form determines which income tax forms that need to be filed. The most common forms of business entities are sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a business structure that is authorized by state statute. Selecting what form you want your business entity to establish is arguably the most important aspect of

The alternative minimum tax (AMT) is a separate tax that is imposed in addition to your regular tax. AMT uses a different set of calculations that are meant to ensure that high earners pay at least a minimum amount of income tax. The AMT calculations limit certain deductions that those high earners can utilize. How does it work? If your income is above the annual AMT exemption amount that typically triggers your obligation to pay the AMT. The most recent AMT exemption amou

As you may likely know, or will now, the IRS has a severe case of understaffing that has caused them to struggle in processing tax returns and refunds. The IRS has 45 days from the date of filing to process and payout a refund, if they are unable to meet that deadline, they have to pay out interest. The interest rates vary depending on what type of filing. The interest rates are set to increase on July 1, 2022, and will be: · 5% for overpayments (4% in the case of a

A 1031 exchange or “Like-Kind” exchange, is where you sell an investment property or business and reinvest the proceeds from the sale in a property or properties of a like-kind of equal or greater value. Utilizing 1031 allows you to avoid paying capital gains taxes at that moment. Steps involved in a typical 1031 Exchange (1) Choose a qualified intermediary that will coordinate the exchange (2) Sell your current real estate property (3) Identify potential replacement propert

Section 1202, or the Small Business Stock Gains Exclusion, allows capital gains from certain small business stocks to be excluded from federal tax. To qualify for Section 1202, the qualified small business stock (QSBS) must have been acquired after September 27, 2010, and have been held for more than five years. In 2015, the Protecting Americans from Tax Hikes (PATH) Act was passed. This Act renewed some expired tax provisions and permanently extended others. 1202 was made

An estate is everything you own, this includes money and assets, such as a home or a car when you pass away. Estate planning is you decide who will get your money and assets. Debts are also part of the estate, anything owed to credit cards or loans will have to be paid off before the assets are distributed to the designated people. Creating an Estate Plan It is important to work with an attorney or tax advisor in the creation of your estate plan. An attorney will guide you

The Federal Reserve is charged with maintaining a stable economy. To do this, the Federal Reserve can either increase or lower the cost of borrowing money. Lower rates generally equate to higher borrowing and more spending by everyone. These lower rates tend to accelerate growth and give a boost to the economy. They allow for an increase in home sales, businesses were able to borrow more for expansion, and so on. On the opposite side, raising the interest rates is a way t

If you didn’t read the last blog post about buying a business, I recommend you read that one first as this one will make a lot more sense if you do. If you don’t want to reread the last one, I’ll summarize it in one sentence. Buying a business is a lot of work, hire a team to help you, the professionals at the Center for Financial, Legal, and Tax Planning, Inc., are the Avengers when it comes to buying a business, so hire us, the end. Now, onto the issue for today. Mistake

Buying a business is an exciting thing to do! But it can also be extremely nerve-wracking to go through the process alone. There are all kinds of accounting issues to deal with, legal documents to go through, lenders, insurance, and something called due diligence that you may be googling to figure out what that means. If I haven’t scared you off yet from buying a business, I’m going to give you a general outline for buying a business whether it’s your first time buying a bu