Tax Planning Services
Tax planning is the key to successfully reducing your tax liability. We’ll help you develop a robust tax plan. We can show you how much tax you owe, when you should pay it, and most importantly, how to reduce it. With access to our tax planning software, you’ll be able to project your tax liability under a variety of scenarios, helping you avoid surprises.
Choosing the right entity for your business is the first step to effective tax planning. The business entity—LLP, LLC, sole proprietorship, partnership, corporation, etc.— that you select for your business can have significant financial and tax implications, making it all the more important to make the right decision. We can explain each choice and its implications and help you choose the structure that will help you save on taxes.
Tax Planning Options
Single Member LLCs & Sole Proprietorships
The IRS sees you and your business as one and the same person. You are required to file a Schedule C as part of your tax return, and you’ll pay a single level of tax on the income generated by your business. Deductions for expenses such as vehicles, travel, home-office etc. all come in to play.
Partnerships and Multi Member LLCs
Similar to Single Member LLCs and Sole Proprietorships, these types of entities are treated as “flowthroughs” or “disregard entities”, meaning you only pay one level of tax on the income generated by the business. The business is required to file a Form 1065 and issues K-1s to the partners / members. You’ll report your K-1 income on your Form 1040 with a Schedule C or Schedule E.
Similar to partnerships, S Corporations are treated as flow through entities, however, that is where the similarities end. An S Corporation is treated as a corporation, and generally, you as a business owner are expected to take a “reasonable salary” through a W-2. The business is required to file payroll returns, an 1120-S and issues K-1s to the shareholders. We strive to help you build a lasting foundation though maximized tax deductions and more money in your pocket.
C Corporations are great if you need to raise capital from a variety of investors. They also offer better tax advantaged fringe benefits than flowthroughs. However, C Corporations are not treated as flowthroughs, which can lead to the dreaded “double tax”. A C Corporation is subject to tax at the corporate tax rate and shareholders are subject to a second level of tax when the corporation pays dividends. A C Corporation is required to file a Form 1120, and depending of the mix of US / Non US investors, additional forms such as 5472s and 5471s may need to be filed with the return.