After my second busy season as a solo practitioner, I made a terrible mistake within my firm. I hired my first employee. As a matter of fact, I hired someone who also had tax and accounting experience. You may be thinking, “What? Hiring is the solution if you were feeling overwhelmed.” That is true, if you are assuming that I had the proper systems in place. The mistake I made was hiring an employee before I was ready. The money was there and ready. The work was there and ready. It only took a few weeks to realize that I didn’t have a capacity issue. I had a systems and processes issue. I am not suggesting that you should work yourself to full capacity, absolutely not. I am suggesting that before you attempt to pass along a task to someone else or put in place automation that you have a written-out process.
State Tax Planning with the “80/20 Company” Exclusion
Ted Stotzer
Many multinational groups find that foreign-source dividends and other income earned by domestic affiliates are fully or partially subject to state income taxation, even where the federal system provides an exemption. This state-level “leakage” can be material – particularly in high-tax jurisdictions – and is often overlooked because the income appears sheltered at the federal level. For groups with predominantly foreign operations, a starting structure or a restructuring that causes one or more domestic affiliates to qualify as an “80/20 company” can substantially reduce or eliminate state taxation on that income.
