Posted on July 19, 2024 in Estate Planning

For people and families with substantial wealth, estate taxes may be a significant concern. The requirement to pay taxes on the assets a person owned can significantly reduce the amount that may be passed on to beneficiaries. Fortunately, federal law provides an exemption that ensures that a certain amount of assets will not be subject to the estate tax.

The Tax Cuts and Jobs Act (TCJA) of 2017 increased this exemption, but this change was not permanent, and it is likely to be reduced in the future. An experienced attorney can provide guidance on the best ways to address issues related to estate taxes, including taking steps to reduce the taxable value of an estate to preserve assets for future generations.

Changes to the Estate Tax Exemption

The TCJA substantially increased the estate tax exemption, effectively doubling it from its previous level. Here is a brief overview of the changes:

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 Posted on June 30, 2024 in Taxation Law

U.S. taxpayers who own foreign assets or earn income in other countries may need to address a variety of complex tax issues. The reporting requirements for foreign accounts and investments are not always easy to understand, and changes to tax laws may lead to new issues that can affect these taxpayers. A recent decision by the U.S. Supreme Court may affect taxpayers with offshore earnings. An experienced attorney can help determine how to address tax issues related to businesses in foreign countries while working to help taxpayers minimize their tax burdens.

Moore v. United States and Taxes on Foreign Assets

The case that the Supreme Court reviewed involved a couple who invested in a business in India. The Tax Cuts and Jobs Act of 2017 implemented a one-time tax on certain types of offshore earnings. These earnings had previously been tax-exempt until money was brought back to the United States. The new law created a Section 965 transition tax that requires U.S. shareholders of specified foreign corporations to treat offshore earnings as if they had been repatriated to the United States. Under this law, the couple was required to pay $15,000 in taxes.

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 Posted on June 26, 2024 in Small Business Taxes

In recent years, the tax laws in the United States have been updated to provide benefits for businesses that invest in clean energy or utilize environmentally friendly vehicles and equipment. Tax credits have been made available for these businesses, and the laws also allow these credits to be transferred between different taxpayers. Understanding when these transfers may be used and the procedures that must be followed when doing so can be a complex matter. To ensure that these issues will be handled correctly, businesses can work with an attorney who has a strong understanding of the applicable tax laws.

Transferring Tax Credits in Return for Cash Payments

The Inflation Reduction Act and the Creating Helpful Incentives to Produce Semiconductors (CHIPs) ACT created a number of different tax credits, and these laws also provided taxpayers with the ability to transfer credits from one entity to another. The IRS has issued regulations detailing the credits that are eligible for transfer and the rules for how they may be transferred. These rules go into effect on July 1, 2024.

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 Posted on June 20, 2024 in Small Business Taxes

For business owners, choosing the right business structure is a critical decision that can have significant tax implications. Many businesses are structured as pass-through entities, which can offer unique tax advantages. An experienced attorney can help business owners understand these benefits and make informed decisions about business structure while also ensuring that the proper steps are taken to meet legal requirements and address tax-related issues.

How Taxes Are Handled for Pass-Through Entities

Pass-through entities are business structures in which taxes apply to the income earned by owners or investors, bypassing corporate income taxes. Business profits and losses will be reported on the owners' personal tax returns. Tax issues that may affect different pass-through entities include:

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 Posted on June 16, 2024 in Small Business Taxes

While owning and operating a small business can be very rewarding, there are some situations where businesses may fail. In these situations, business owners or partners will need to understand how to wrap up and dissolve the business. This process will involve a variety of steps, including procedures that must be followed to meet all applicable federal and state tax obligations. Properly managing these tax concerns can help ensure a smooth closure and prevent future legal issues. An experienced attorney can help business owners navigate these complexities and avoid potential issues that could lead to penalties.

Addressing Federal Tax Issues with the IRS

When closing a business, it is crucial to notify the IRS and resolve any outstanding federal tax obligations. This process will include the following steps:

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 Posted on June 06, 2024 in Small Business Taxes

When starting a small business, there are a variety of tax concerns and other legal issues that will need to be addressed. Navigating the complex landscape of business regulations and state and federal taxation can be a daunting process, but by taking the correct steps when founding a business, a business owner can help avoid penalties or other complications in the future. An attorney who has a strong understanding of tax law and business law can provide invaluable guidance for small business owners, ensuring that they meet all of their legal requirements and are positioned for ongoing success.

Choosing the Right Business Structure

The structure selected for a small business will affect tax obligations, liability, and operational flexibility, among other legal and financial aspects of ongoing business operations. Some of the most common options for business structure include:

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 Posted on May 14, 2024 in Taxation Law

Corporate stock repurchases, also known as buybacks, are a common way for companies to return value to their shareholders. While repurchases can be beneficial for both a company and its shareholders, they also come with tax implications. The Inflation Reduction Act of 2022 created an excise tax that applies to corporate stock repurchases, and the IRS has provided guidance on how this tax will be calculated and the requirements that will apply to taxpayers. To ensure that these rules will be followed correctly, corporations and affiliates that engage in stock buybacks can work with an attorney who has a strong understanding of the applicable tax laws.

Understanding the Excise Tax on Stock Repurchases

Under the Inflation Reduction Act corporations are now subject to a 1% excise tax on the net value of stock they repurchase. This tax applies to stock repurchases performed after December 31, 2022.

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 Posted on May 01, 2024 in Tax Audits

Dealing with the IRS can be stressful even in the best of situations. The requirement to pay taxes can cause financial difficulties for taxpayers, and the possibility of making mistakes on tax returns or other tax forms may lead to issues such as tax audits, as well as the requirement to pay penalties or interest. Because of the complexity of tax laws and the many opportunities for errors, understanding the best ways to address these issues can be difficult. It is important to understand the difference between assessed penalties and deficiency penalties. An experienced attorney can help taxpayers navigate the complexities of tax laws, appeal incorrect assessments, determine when penalty abatement may be available, and address other tax-related concerns.

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 Posted on April 24, 2024 in Employment Taxes

In many modern workplaces, employees struggle to maintain the proper balance between their professional responsibilities and personal lives. They have a variety of needs, including managing care for children or elderly family members, determining their eligibility for government benefits, and navigating the healthcare system to ensure that they can receive the proper medical treatment.

To address these issues, employers may provide work-life referral services as part of their benefits packages. It is important for employers to understand the tax implications of these benefits. An attorney with experience in tax law can provide guidance for employers, ensuring that they handle employment tax issues correctly.

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 Posted on April 18, 2024 in Tax Audits

Because of the high costs of taxes in the United States, taxpayers will often be looking to utilize any deductions or credits that may be available. Unfortunately, this may leave some people vulnerable to tax scams in which they are encouraged to claim inappropriate deductions. The IRS has noted that some companies are encouraging people to claim deductions for health and wellness expenses. 

While there are some legitimate medical expenses that are deductible, claiming inappropriate deductions could lead to tax audits or IRS penalties. An attorney with experience in tax law can help address these situations and ensure that a taxpayer takes the correct steps to respond to the IRS and avoid or minimize penalties.

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