Taxation of LLCs

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Limited Liability Companies (LLCs) have become a popular choice for entrepreneurs and small business owners due to their flexibility and liability protection. One of the key advantages of forming an LLC is the flexibility it offers regarding taxation.

By default, LLCs are pass-through entities, which means that the business’s profits and losses are reported on the owners’ personal tax returns. However, LLCs also have the option to change this default treatment through a tax election (aka the “check-the-box election”). No matter what election you make for tax purposes you will still legally be an LLC and no tax election would change that.

Tax Planning: Don’t Let the Tax Tail Wag the Dog

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When it comes to income taxes, many people assume that saving means spending more money on eligible deductions. While certain expenses can be deductible, tax planning is much more than just blindly spending more money to save in income tax. Smart tax planning involves restructuring your finances, optimizing deductions, and making strategic decisions that can save you significant money without necessarily requiring excessive spending.

Defined Benefit Plans: Tax Savings & Advantages for S Corporations

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Implementing and managing defined benefit plans can be complex, requiring professional guidance and expertise. However, when planned and executed correctly DBPs can provide significant tax savings and retirement benefits.  Financial advisors, actuaries, and tax consultants can provide the necessary knowledge and support to navigate the intricacies of these plans, ensuring compliance and maximizing the tax-savings potential for S Corporations. Please consult with your advisory team especially your financial advisor to determine the viability of a DBP for your business.

Financing the Exercise of Stock Options & Tax Implications

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Stock options are a popular form of compensation for employees, especially those working for start-ups, high-growth companies, and tech companies. When an employee is granted stock options, they are given the right to purchase a specific number of shares at a set price on future dates based on a vesting schedule.  Before considering how to […]

5 Things Every S Corporation Owner Should Know

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There are few things in the tax world that have as much misunderstanding and misinformation than S Corporations.  S Corporations can help small businesses achieve various goals but only if set up and administered correctly with a good understanding of the tax law.  Below are 5 things every S Corporation owner should know, and should have known prior to being taxed as an S Corporation.

The Pass-Through Entity (“PTE”) Election: Is It Right for Your Small Business?

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The PTE election can be a valuable tool in helping small businesses deduct more of their state income tax payments.  Determining if the PTE election is viable for your small business depends on many factors that aren’t able to be covered here.