legal
How Can I use the Kiddie Tax?
The Small Business and Work Opportunity Tax Act of 2007 introduced a number of tax incentives for small business, but included a few pitfalls for individuals. For 2007, a child under the age of 18 is subject to the “kiddie tax” (and thus pays tax at his or her parents’ highest marginal tax rate on [...]
What is the difference between a C corporation and an S corporation?
Both S and C corporations are formed the same way - by the filing of Articles of Incorporation with the Secretary of State’s office. As a legal matter, the S corporation is identical in many ways to the C corporation because both limit the shareholders’ personal liability. But as a tax matter, the S corporation [...]
How can I use the State and local sales tax deduction.
Despite being one of the more popular tax breaks, the deduction for state and local sales taxes is not permanent and is set to expire at the end of 2007. The American Jobs Creations Act of 2004 gave taxpayers who itemize deductions the option of claiming either state and local income taxes or state and [...]
How can I reduce my 2007 taxes - Gift-giving
Take advantage of the 2007 annual and lifetime gift-giving limits to reduce your income and estate tax liabilities. For 2007 and then again in 2008, you can transfer $12,000 per person, per year, without paying gift tax on the amounts transferred.
Married couples can gift $24,000 per person, per year without tax liability on the [...]
How can I reduce my 2007 income tax? Income shifting
One of the most fundamental year-end tax planning techniques involves accelerating deductible expenses in 2007 and deferring income, if economically feasible, into 2008. By delaying taxable income you defer taxes. Delaying taxable income may also prevent you from losing lucrative tax breaks that can be reduced or eliminated altogether as your income level rises and [...]
What is a corporation?
A corporation is a more complex business structure generally. It is a legal entity separate from its owners, called “shareholders,” who own shares of stock in the company. For “regular” or C corporations (often used for large and publicly traded companies), profits are taxed both at the corporate level and again when distributed to shareholders. [...]
How does the LLC end?
The death, retirement, withdrawal, or bankruptcy of a member or manager may end the existence of the LLC, depending on the terms of the operating agreement. Apart from the death, retirement, bankruptcy or withdrawal of a member or manager, an LLC usually only ends upon the date of expiration (often set 25 - 30 years [...]
Who runs the LLC?
If there are many members of an LLC, a limited number of people can be chosen to actually run the LLC for the members. They are the managers. The managers can be, but do not have to be, members of the LLC. The managers can be set up to resemble a board of directors if [...]
How is an LLC created?
After submitting Articles of Organization to the Secretary of State’s office, the members enter into a written agreement, called the “Operating Agreement,” about how the LLC will be run, who is in charge of running it, how profits will be divided up, etc. If there is no operating agreement, then the “default” rules for running [...]
What are the specific qualities of an LLC?
As discussed previously, the LLC is advantageous for small businesses becasue it combines the limited personal liability feature of a corporation with the tax advantages of a partnership and sole proprietorship. Profits and losses can be passed through the company to its members or the LLC can elect to be taxed like a corporation. LLCs [...]
