Client Alert
The Family Business and Taxes Part One
What is one thing that most business owners have in common? Why did you start your business? Many business owners I have talked to over the past decade started their entrepreneurship journey for similar reasons. Think about your clients and what reasons they have given you and see if these ring true. “I want to be in control of my time.” “I need to spend more time with my family.” “I don’t want a cap on my earning potential.” I find those to be pretty noble reasons. I haven’t come across a business owner yet that says, “I want to pay more taxes for fun.”. So as an advisor how can we help our clients have freedom, time with family, and save on taxes? One strategy is to hire family members. It can’t be any family member though, remember there is a strategy to this. I know some of you are thinking, “that sounds great!”. Then others of you are thinking, “who wants to work with their family?”. Well trust me, when saving money is the topic of discussion more people tend to listen. The least you can do is present your clients with the facts, and here they are: • The taxpayer can avoid paying certain payroll taxes by hiring a family member. • You can help them potentially drop a tax bracket while keeping the spending power in the family. • Protecting a spouse from tax debt. • Lower Federal student loan payments. To do this we have to make sure the client hires their family as employees. This whole strategy goes down the drain if the family member is a contractor that receives a 1099. Today we will focus on how to properly implement the game plan when hiring a parent or spouse.
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Yes, Virginia, There is a Tax Bankruptcy!
In society, bankruptcy no longer carries the humiliating stigma of failure ; which is why there are hundreds of thousands of bankruptcy filings each year. Interestingly enough, filings have been dropping dramatically since 2018. The total individual and business filings for fiscal year 2022 are nearly half of those from 2018. The statistics don’t include specific information about how much tax debt was extinguished in bankruptcy. Filing bankruptcy is not for everyone. It can be a viable option for those people whose tax debt meets certain criteria. The following is a basic overview of the concept...
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Breaking Down Tax Benefits for Higher Education
With the rising cost of higher education and greater reliance on student loans, taxpayers are looking for every opportunity to ease the financial burden of earning a degree. Fortunately, several higher education tax benefits are available to help offset the high cost of tuition, student loans and other education-related expenses. However, certain eligibility requirements — such as income limits and tax filing status — often trip up taxpayers along the way. Understanding the nuances of these tax benefits for higher education can ensure your clients take full advantage of available tax savings.
Don’t Forget About the Refund Statute Expiration Date
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