Own an S-Corp? Consider These Three Questions for Tax Year 2018

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The 2017 tax year has come to a close, and the new “Tax Cuts and Jobs Act” (TCJA) is officially in effect as of January 1, 2018.  If you own any company organized as a pass-through entity (Noncorporate business), you may be thinking you’re in the clear for 2018 – surely you’ll be paying a lot less in taxes this year, right?  Well, that may not be true as some of the deductions you may have utilized prior to this year have been phased out.  If you’re hoping to minimize your tax liability and retain more revenue this year, you might want to consider the following questions:        Continue reading “Own an S-Corp? Consider These Three Questions for Tax Year 2018” →

How Manufacturers Can Maximize their Wealth

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If you own a business that manufactures a product, you may be wondering which options are available to maximize your wealth, optimizing your business structure, and minimizing your tax liability this year – and in the future. After all, by retaining more of your income, you’ll be able to reinvest in your business, leading to more growth and stability for you and your employees.

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THE NEW INCOME TAX BILL WILL NOT SAVE MUCH MONEY FOR MOST PASS-THROUGH COMPANIES

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You’ve probably been hearing a lot about the new tax bill Congress passed at the end of last year. The majority of business owners believe they just received a huge tax cut and that, in the years to come, they will have more liquidity to do with as they please. Unfortunately, many will most likely see a reduction of less than 5% in their tax liability.

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Will the Tax Cuts and Jobs Act Affect Small Captive Insurance Companies?

Posted by Richard Colombik, JD, CPA on

By Jeremy Colombik, CPA
President, Management Services International
and Richard M. Colombik, JD, CPA, Tax Law Solutions

The end of 2017 delivered uncertain tidings concerning what effect the Tax Cuts and Jobs Act, the most significant US tax reform in more than 30 years, would have on the captive insurance industry. While the law affects larger captive insurers, or 831(a)s, changes are less significant for smaller captive insurance companies, or 831(b)s. Continue reading “Will the Tax Cuts and Jobs Act Affect Small Captive Insurance Companies?” →

THE PUERTO RICAN MIRACLE: PAY ALMOST NO BUSINESS OR PERSONAL INCOME TAX LEGALLY!

Posted by Richard Colombik, JD, CPA on

“Of course, it must be too good to be true!” “My accountant said it is illegal and will increase my audit risk and I may go to jail!” “If it existed everyone would know about it!” I have heard every variation of reasons not to fully realize the benefits available in the Internal Revenue Code. However, my 37 years of taxation experience allows me to understand that no one, not myself, not your CPA, and not even your tax attorney knows everything.

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Substance over Form? Or just good tax planning? Captives are looking good!

Posted by Richard Colombik, JD, CPA on

In Summa Holdings, Inc. v. Comm’r, T.C. Memo 2015-119, the 6th Circuit Appellate court has partially put a leash on the IRS Commissioner to argue that a transaction, if done solely for income tax purposes may be set aside, on substance-over-form arguments, if the transaction clearly follows the Tax Code! It does not sweep away this overly broad tool of the IRS to claim that a transaction should be recharacterized because a business chose the lowest tax method to structure the transaction, but allows such structure, if it is a path that Congress intended.

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C-Corp

WHAT BUSINESS ENTITY MAKES SENSE FOR YOUR FIRM? – PART 2

Posted by Richard Colombik, JD, CPA on

Use of a Single-Member LLC

A single-member LLC’s provides considerable flexibility for its owner. Individuals forming a new business may choose to forego the liability of operating the business as a sole proprietorship, or the forming a corporation to own the business, by creating a single-member LLC which would own and operate the business and assets. The single-member LLC provides advantages over partnerships with a single equity source because a single-member LLC eliminates the need to have two or more owners and this may result in fewer costs by avoiding the need for creation of more than one legal entity to act as “partners.” Additionally, single-member LLC’s may be used to own multiple divisions of a business or multiple real properties with ownership is vested in a single-entity.

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Business Entity

WHAT BUSINESS ENTITY MAKES SENSE FOR YOUR FIRM? – PART 1

Posted by Richard Colombik, JD, CPA on

Illinois Limited Liability Companies (“LLC”) are governed by 805 ILCS 180/1-1. The Limited Liability Company Act (“LLCA”).

An LLC is a separate legal entity and requires certain procedural steps be followed. First, the LLC organizer(s) must file articles of organization (the LLC counterpart to a corporation’s Articles of Incorporation) with the appropriate state agency (generally, the Secretary of State). The articles of organization must contain: the name and address of the principal place of business of the LLC; its period of duration; the business purpose (ordinarily, language to the effect of for the transaction of any or all lawful business for which limited liability companies may be organized under the Limited Liability Company Act); the registered agent’s name, the registered agent’s address; the name(s) and address(es) of the initial LLC’s manager(s) or members; and a statement indicating that the LLC is managed by managers; the names and addresses of each organizer; and any other provision the members/managers elect to include.

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