Browsing All Posts filed under »Tax«

Congress Avoids Fiscal Cliff And Passes First Major Tax Increase in Almost Twenty Years

January 3, 2013

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Early Tuesday morning, the U.S.  Senate passed a bill aimed at averting spending cuts and tax increases that comprised the dreaded “fiscal cliff.”  House Republicans were extremely critical of the bill for not including enough spending cuts.  However, the House approved the bi-partisan legislation under the extreme pressure of trying to avoid the fiscal cliff […]

Why Operating Agreements Are So Long

September 25, 2012

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A debate exists amongst parents whether going from no kids to one kid, one kid to two kids, or two kids to three or more kids is most difficult.1 In a business entity, there is no debate; the most challenging transition is going from one owner to two. Throughout our choice of entity discussion, one […]

Sole Proprietors

September 18, 2012

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Often overlooked in the choice on entity analysis is the sole proprietorship option, but sometimes the best thing to do is nothing at all. To be a sole proprietor, all you have to do is walk outside (or stay in your home office) and start your business. It is the easiest, most affordable, simplest method […]

Qualifying For The Qualified Small Business Stock

September 13, 2012

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As we covered last week, the appeal of C-Corporations lies largely in their greater flexibility to find investors. Many VC firms will only work with C-Corporations, C-Corporations have unlimited domestic and foreign shareholders and C-Corporations can offer different levels/types of stock. The Qualified Small Business Stock (QSBS), the 50% tax break on gains that goes […]

The Case For The C-Corporation

September 12, 2012

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First, the common wisdom of why not to do C-corporations: Many practitioners argue that there is no such thing as the emerging growth C-Corporation. Their argument falls along the lines that very few start-ups need to immediately consider the pros of unlimited shareholders and large growth. Unless you’ve made a better mousetrap and can virtually […]

LLC vs. S-Corp: Real Estate Issues and Miscellaneous Tax Issues That Shape Your Choice of Entity Thinking

September 6, 2012

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Multi-member LLCs are taxed as partnerships unless affirmatively elected to be treated in a different manner.1 Partnership tax can be found in chapter K of the IRS Code. S-Corporation is a reference to the IRS code section, e.g. chapter S. These chapters are similar in that they tax the shareholders and not the corporation, which […]

LLC vs. S-Corporation: The FICA Tax Reason

August 23, 2012

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In previous articles, we have mentioned that both LLCs and S-Corporations are taxed only at the shareholder level, which puts both of them in a favorable income tax position. Thus, one might assume that the decision is tax neutral. Of course, when it comes to tax, it rarely is that simple. Many professionals, accountants in […]

LLC vs. S-Corp: The Two Leading Contenders

August 21, 2012

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One day, an entrepreneur went to a seminar about legal issues facing small businesses. The speaker said, “Whatever you do, you must be an LLC.” Then, the next speaker got up and said, “Whatever you do, you must be an S-Corp.” In truth, they are both right. By and large, choice of entity most often […]

The Taxman Cometh

March 9, 2011

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With April 15 nearing, Red Mountain Law wonders how you prepare for tax season:

Small Business Owners And Health Insurance

December 9, 2010

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Last Thursday, December 2, the IRS announced new tax breaks for small business owners. As part of the Affordable Care Act that was passed in March, employers will now be able to deduct large percentages of the heath care premiums they pay for their employees. According to the IRS, “The small business health care tax […]

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