Corporate & Partnership Taxation
The tax landscape is becoming ever more complex, laws and regulations are not only growing but increasing in their scope. Our tax accountants are equal to this task and can assist in many facets of tax planning. This may include:
- Year End Planning
- Tax Return Preparation
- Analysis of new & proposed legislation
- Buy-sell agreements
- Executive compensation
- Succession planning
- Liquidating events and planning
- Tax compliance
Tax planning is vital for our clients to help them achieve their future goals for wealth and retirement planning. We strive to assist our clients in developing goals and tax strategies to achieve both short term and long term objectives. This may include education planning, charitable giving planning, retirement planning, stock option consulting, year end tax planning as well as personal tax preparation. We work with a number of closely held business owners and our talented tax staff dedicates themselves to ensure integration across this business and personal spectrum. We also provide tax compliance services and tax strategies for our clients.
Tax Exempt Organizations
These entities have a unique set of tax rules entirely unrelated to those governing businesses. The landscape here is also complex and includes obtaining and maintaining tax exempt status, unrelated business income tax issues, tax compliance (payroll, sales and other), consultation regarding IRS required reporting to donors, required federal (Form 990) and state filings, as well as internal control development. We enjoy working with the not for profit community because they really do make a difference in the world.
Sales & Use Tax
Every business type is affected by sales and use tax at some level. If you are a business owner operating in one state or multiple states, concerned with nexus issues, or a manufacturer concerned about exemptions, a non-profit concerned about collecting sales taxes, we can assist you in managing this complex landscape. As states become ever more strapped for cash their auditors are checking to ensure compliance with paying the requisite taxes, as well as expanding types of services to which taxation applies. The documentation required in this area makes what seems to be a simple process quite involved. We have tax specialists that help you and your business navigate these murky waters and stay current and in compliance with related state laws.
Many small businesses want to focus on just that – running their business. That may require them to outsource certain aspects of their payroll processes. This may include quarterly preparation of 941’s, unemployment filings, annual W-2 preparation and tax deposits. Payroll laws are constantly changing which makes staying compliant in this area especially challenging. If you are a business contemplating transitioning from in house payroll services to an outsourced model or are transitioning from one payroll software to another, we can provide the tools to make the transition as efficient and effective as possible.
The choice of legal entity for your business is critically important. The decision affects your taxability, risk exposure, benefits, as well as business operations and their profitability. This decision may also affect the accumulation of wealth for the owner. This selection should not be limited exclusively to tax attributes although achieving the most tax-efficient legal form for operating your business is important. Financing your business, taking distributions from your business, winding down operations and succession planning are also important factors in this determination.
Entity structuring for your specific business should include both short-term objectives and goals as well as long-term business needs. Your personal financial situation may change as your business grows and your form of business may need to change as well. If changes need to be made to accommodate new or changing situations, it is important that you understand the tax consequences fully before making any changes to the entity form.
Here are a few considerations to keep in mind as you contemplate the entity type:
- Liability protection for owners
- Tax Rates and Pass-through taxation versus double taxation
- Flexibility in the types of allowed owners and numbers of owners
- Flexibility of distributions and allocation of tax items
- Employment tax consequences, employee benefits
- Types of property (assets) to be held in the business
In most states, S corporations pay no income tax. Their income and losses are passed through to their shareholders. Massachusetts does, however impose a tax.
S corporations avoid the double federal taxation inherent in C corporations, but they must follow strict rules. S corporations that were previously C corporations can trigger corporate-level tax in certain situations.
S Corporations are allowed to have up to 100 shareholders. The make-up of eligible members includes the following:
- members of the same family may be treated as a single shareholder
- estates, certain trusts, and tax-exempt organizations may also be shareholders
Limited Liability Companies and Partnerships
The most commonly used legal structure for newly formed domestic entities involves partnerships and Limited Liability Companies (LLCs) which have evolved as the entity of choice for many businesses today. When formed, LLC’s unless they elect otherwise will be treated as a partnership by default. LLC’s have many of the same pass-through taxation features of S Corporations but have added flexibility.
This type of entity is probably best associated in most people’s minds with large businesses. C corporations are taxed as separate entities from their shareholders. The corporation pays taxes and the shareholder pays taxes again on any dividend payments – the so called “double taxation”. Investors are taxed on the dividends they receive. C Corporations come in all sizes, and smaller C Corporations tend to pay out profits in the form of bonuses at year end to limit the corporate level tax. C Corporations are used infrequently for new entities, but they can sometimes offer benefits that cannot be accomplished in other types of entities (tax-advantaged fringes).