You want to protect your company against disruptive, harmful, and nonproductive owners, which may include divorced spouses, competitors, and disgruntled former employees. And you’re also thinking that your estate needs protection. You decide to enter into a buy-sell agreement while the interests of the parties—your partners and yourself—are aligned or at least not sufficiently misaligned that it would be impossible to discuss the business and valuation aspects of these agreements. You know that when a trigger event occurs, the interests of the parties—buyers and sellers—may diverge and agreement over pricing and terms can become difficult or impossible to achieve. The
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Archives for Newsletter and Updates
Wondering if You’re Eligible for R&D Credits
If you’re a business owner who wants to eliminate the uncertainty in developing a new product or improving an existing one, you’re probably engaging in research and development. Unfortunately for them, many business owners don’t realize that in some cases, R&D expenditures may be eligible for a tax deduction. Or perhaps they think that some expenses are deductible when they’re not. The IRS notes that “R&D expenditures generally include all expenditures incident to the development or improvement of a product.” The term “product” has a wide range in this context and can include: Formula Invention Patent Pilot Model Process Technique
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Tax Calendar for the Rest of 2017
There are several dates throughout the 2017 tax calendar you need to remember for your own personal taxes and possibly for your business taxes. September 15 Individuals: If you are not paying your 2017 income tax through withholding (or you will not pay enough tax during the year that way), pay the third installment of your 2017 estimated tax. Use Form 1040-ES (Estimated Tax for Individuals). For more information, see IRS Publication 505 (Tax Withholding and Estimated Tax). Partnerships: If a six-month tax extension was requested/obtained, file a 2016 tax return (Form 1065), and pay any tax due. Provide shareholders with a
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The Decision to Buy or Lease for Business Owners
After paying rent for several years, many business owners are not thrilled about helping their landlord build equity in the building and ultimately they regret not purchasing the property from the outset. The principals at Beckner & Associates, a real estate firm in Lenexa, Kansas believe most businesses should own their own property. The hard questions are when and how. This is why it’s critical for small-business owners to consider the advantages of owning their property as well as understand the issues accompanying purchase. Advantages Tax deductions such as mortgage interest, property taxes and depreciation can help a small-business reduce the
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President Trump’s Tax Reform Plan Proposal
The President’s recently released tax reform plan as detailed below is similar to the proposals made on the campaign trail. For business taxpayers: The top tax rate for all businesses including Partnerships and S Corporations (pass-through businesses) would be slashed to 15%. The current top tax rate is 35% for corporations and 39.6% for pass-through businesses. Upon cash distributions from pass-through entities, a second layer of tax might be imposed similar to dividends now taxed to C corporation shareholders. For Individual taxpayers: The current seven individual income tax rates of 10%, 15%, 25%, 28%, 33%, 35% and 39.6% would be
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Learn the IRS Red Flags That Can Trigger an Audit
What triggers an IRS tax audit? While the IRS isn’t about to publish a list, there are a number of items that are known to raise the IRS’s interest in a return. What are your chances of being audited? For individuals, it depends on your income. In fiscal year 2013, returns reporting income of under $200,000 stood a 0.88 percent chance of an audit. Those with incomes of $200,000 and more had a 3.26 percent chance. And if your income was $1 million or more, you had a 10.85 percent chance. While audit rates were generally down in 2013 from
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How S Corporations Can Save on Federal Employment Taxes
If you own an unincorporated small business, you may be getting fed up with high self-employment (SE) tax bills. One way to lower your SE tax liability is to convert your business to an S corporation. SE Tax Basics Sole proprietorship income as well as partnership income that flows through to partners (except certain limited partners) is subject to SE tax. These rules also apply to single-member limited liability companies (LLCs) that are treated as sole proprietorships for federal tax purposes and multimember LLCs that are treated as partnerships for federal tax purposes. For 2017, the maximum federal SE tax
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Factoring Uncertainty into the Value of Your Business
Businesses currently face numerous uncertainties in the marketplace. As President Trump and Republican congressional leaders work toward fulfilling their campaign promises, tax laws could substantially change, the estate tax could be repealed, and various laws and regulations (including the Dodd-Frank and Affordable Care Acts) could be repealed or revised. Interest rates and inflation could both rise. Economic relationships with other countries could also change. Some of these changes could be good for your business, while others could have negative effects on the value of your business. History Lesson Business valuation professionals are no strangers to dealing with market uncertainties —
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Leverage Benefits to Recruit and Retain Talent
It’s a lot more efficient to retain good employees than to find and hire new ones. The Society for Human Resource Management (SHRM) recently asked its members how they are adapting their employee benefit programs to avoid losing quality workers. Two-thirds of respondents in the study represent employers with fewer than 500 employees. SHRM’s “Strategic Benefits” study set the stage by asking employers how many are having a tough time retaining highly skilled employees. Fully 37% reported that this is a problem for them — up from 27% only four years ago. That challenge was more acute among self-described “high-tech”
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Remember RMDs this Tax Season
Did you know that, once you turn age 70½, you must start taking mandatory annual withdrawals from your traditional IRAs, including any simplified employee pension (SEP) accounts and SIMPLE IRAs that you set up as a small business owner? These mandatory IRA payouts are called required minimum distributions (RMDs). And there’s a stiff penalty if you fail to take timely distributions. Unfortunately, taking RMDs also will cause you to report additional taxable income on your federal income tax return. This will increase your federal income tax liability and possibly your state income tax liability, if applicable. Here are the rules
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