Loopholes

Looking at a Trust to Reduce or Eliminate Your Federal Taxes? Not So Fast!

Question: What kind of trusts help a taxpayer pay less or no federal tax?

Answer: If you have trusts and want to minimize state taxes, there are options available. In the United States, there are two types of trusts for federal income tax purposes: grantor and non-grantor trusts. A grantor trust is one the creator or their spouse retains enough control over that they are still the assets’ owner. Therefore, they must pay taxes on any income or gains it generates.

On the other hand, a non-grantor trust is its own entity and is responsible for paying its own taxes. However, state tax laws also have an impact on the taxes trusts must pay. By choosing the right trustees or assets for your non-grantor trust, it’s possible to minimize or even eliminate state income taxes. Don’t miss out on this opportunity. Learn more about your options and take steps to reduce your trust taxes today. Click here to continue reading.

Subscribe to Read the rest of the article

Think Outside the Tax Box provides tax reduction strategies along with practical implementation advice in order to reduce your clients’ federal tax bill with ease.

Already have an account? Sign in

CURRENT EDITION

The Wild West of Employee Retention Credits (ERC): Outlaws, Deputies, and Cowboys

Dominique Molina, CPA MST CTS

Gather ’round, pardners! The Employee Retention Credit (ERC) has been the latest gold rush in the tax frontier, drawing business owners, tax deputies, and even a few sly outlaws. But as the dust settles, the IRS—our law keeping sheriff—is on the hunt for any who might’ve bent the rules. In this frontier of finance, knowing who’s who can keep you out of trouble as the IRS rounds up dubious claims.

Selected Techniques to Monetize Tax Attributes

Ted Stotzer

In the prior article “Tax Trends in M&A and What It Means for Your Clients,” we had discussed certain techniques to, e.g., maximize net operating loss (“NOL”) and interest expense deduction utilization in the context of M&A transactions. This article examines certain additional strategies to monetize expiring, latent, or otherwise disallowed tax attributes.

Do Those Tricks Really Work?

Peter J Reilly CPA

On the website for Axium Wealth, Charles Dombek tells us that: “Most CPAs are historians that tell their clients how much they make, how much they owe, when and where to file their taxes, and oftentimes how to write large checks at the last minute when you least expect.” When it comes to Axium, though: “We help clients recover dollars they unnecessarily pay in State and Federal income taxes.” Axium also helps clients diversify capital into off-market passive real estate and alternative investments. Before Axium, there was The Optimal-Financial Group LLC. Of course many of the readers of Think Outside The Tax Box are CPAs, or EAs or others who both help their clients be compliant and advise on ways to minimize their liability. When I was practicing I would call the things I might suggest my “bag of tricks.”