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S Corporation Tax Planning Questions

Do you need to add an entity to your tax structure?

This is such an important question for mid-year planning because knowing the right time to add an entity to your tax strategy can often save as much as $10,000 per year in taxes!

What entity should you consider adding to your tax structure?

Many of you want to know what entity you should consider adding to your tax structure. There are 2 levels of tax planning to consider in answering this question.

** Level #1 **

This level is for those business owners or investors who are either just starting their business or investment or are in the “ramp-up” phase of their business or investment. The ramp-up phase may mean you are a few months in to your new business or investment, or perhaps even a few years depending on the type of business or investment. The ramp-up phase means your business or investment has not yet produced a profit. Now, without profit, taxes are likely minimal or even non-existent, which is why the focus of this level is building a strong foundation for your tax structure so once there is profit, your tax structure is already in place to immediately minimize your taxes.

I often get asked the question “When should I form my entity for my business (or investment)?”

Many of the people I talk to are unsure if they should get their business up and going first, and then worry about the entity, or if they should have the entity in place even before starting the business or investment.

The answer to this depends somewhat on the type of business or investment, however, if I have to give an answer, I recommend setting up the entity first. This is because the right entity can grow and change with you as your business or investment grows and changes. Plus, outside of the tax benefits, many entities offer some level of asset protection which most people rank as an important planning factor.

So for those of you in Level #1, the entities to consider adding to your tax structure are:

Limited Liability Company (LLC). LLCs are the most flexible entity for tax purposes. LLCs can start off being taxed one way and then elect to be taxed differently. This means your LLC can adjust to the tax planning needs of your business or investment because your LLC can be taxed as a sole proprietorship, partnership, S corporation or C corporation. This flexibility is key in building a strong foundation for your tax structure and to minimize future taxes. S Corporation or Partnership. If your LLC will be formed in a state that assesses a separate tax on LLCs, then you should consider adding an S corporation or partnership instead of an LLC.

** Level #2 **

Level #2 is for those who already have a strong foundation in place for their tax strategy, and whose business or investment will soon be exiting the ramp-up phase or has already exited the ramp-up phase and is producing income. At Level #2, the focus is minimizing the tax liability created by your business or investment.

Consider a C Corporation if you are in the Level 2 planning group

One way to eliminate – not just reduce taxes – is to shift income to a taxpayer in a lower tax bracket. A C Corporation has initial tax brackets of 15% and 25%. If you are in an individual tax bracket of 25% or higher, then there could be an opportunity to reduce your taxes by shifting some of your income to a C Corporation.

For example, if you are in a 35% tax bracket individually and are able to shift $50,000 of income to a C Corporation, then your income tax is reduced by $10,000! And this can be an annual savings of $10,000!

BUT…

I know from experience that any time I suggest a C Corporation in a tax strategy, people panic! They think of all the bad things they’ve heard about C Corporations:

But what about the double tax?

But what about the personal service corporation tax?

But what about getting money out?

But what about the accumulated earnings tax?

What most people don’t know (including many CPAs) is how to legally avoid these tax traps…BUT I do! In fact, some of them are not even tax traps at all – I have found ways to use some of these so-called traps to save taxes!

About the Author:

Tom Wheelwright is not only the founder and CEO of Provision, but he is the creative force behind Provision Wealth Strategists. In addition to his management responsibilities, Tom likes to coach clients on wealth, business, and tax strategies. Along with his frequent seminars on these strategies, Tom is an adjunct professor in the Masters of Tax program at Arizona State University. For more information please visit http://www.provisionwealth.com

Article Source: ArticlesBase.com – Mid-year Tax Planning: Do You Need to Add an Entity?

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Good Fundraising Ideas For Clubs

Question: What are some good fundraising ideas my school’s Green Club can do?

I’m in the Green club at my school and we want to raise money to donate to different kinds of organizations that will help our planet be a better place, but also keep a little for future fundraising ventures. Themes for fundraising can range anywhere from endangered animals, global warming, air pollution, rainforest deforestation, ocean pollution, etc. Our school already recycles and we’re planning to plant a tree in our school’s quad (hopefully!). Anyways, does anyone have any successful fundraising ideas?
Oh, and we try to make our fundraising excursions a bit different from the same old bake sale, although bake sales do work… creativity would also be appreciated. All sorts of ideas are welcome! Thank you!

Answer: You could try an auction of promises - a very green thing to do and you don't rely on badgering people for prizes! Put out an email or letter to the parents (and on freecycle) asking for donations of promises, this could be a cleaner for 2 hours; a cake baked for a special occasion; help with DIY or gardening. If you are lucky some parents maybe able to offer goods or services from where they work. In the last one I did we had a box in a west end theatre to see a musical; a trip on the london eye; a trip to paris (courtesy of a parent who ran a travel agency) and a trip to the london dungeon.

These prizes generated a lots of interest and a lot of money.

You could also try a 'Race Night' you can buy these in or do one yourself - You need a DVD or video of some races - these can be horse races, dog races or even silly things like chariots (taken from ben hour) or an old video of a school sports day (obviously not recent ones as people will remember who won lol) you can even do things like snail races lol.

now you've got the races you need to sell the horse/dogs etc. you need to sell the horses/dogs etc. You do this by working out how many participants (horses dogs etc) are in each race and draw up a table with the following headings

Horse/Dog/Etc Name Owner Price paid

Do this for each race and leave on race for horses to be bought on the night (you can auction the horses off in the middle of the evening)

Usually £5 to buy and name a horse is ok but you can do it for less or more

This is where it is handy to have someone who can set the odd for you. This is where the bought packs (amazon have a good one) are good as they will give the odds for you. But if you know someone who works in a betting shop or casino they should be able to do it for you. Even a trip to your local independent bookmaker could be good as they may be able to do the odds for you - it shouldn't take them too long and they won't have to give you anything to support your cause.

On the night you will need a host and a two or three cashiers. You can limit bets or not. But limiting the bets to a max of £5 on a horse is good to do as you won't be paying out more than you get in!

For the last race auction the horses as this will yield more money for you as people get caught up in the atmosphere.

The last one of these I did gave us a profit of over £500 - not bad when the attendance was around 40 people! - We had also been given a two night trip to Paris so we made that a prize for the owner of the winning horse on the auction race.

I did another one to raise funds for someone with cancer and we had such a good turn out we raised nearly £1.5k after paying out for costs.

Why not contact BCTV (British Conservation Trust Volunteers) to get some volunteers and ideas - they are dedicated to helping Green projects and are in most areas of London. http://www2.btcv.org.uk/
Hope your event goes well.

Good Fundraising Ideas Support BDBorg by Dan Weik

Tax Planning Services

Question: Can my cell phone plan qualify me for the $30 IRS refund of the federal excise tax on long distance service?

Answer: It depends on your phone plan, but most telecommunications services charges this tax. We'll just have to wait and see what obstacles the IRS puts in place to deter people from claiming it.

DeafTax.com - Income tax preparation and planning services for the Deaf community.flv

Offshore Tax Planning Review

For many years, people that need asset protection created offshore trusts. But because the costs are to big an alternative option has appeared in some US states. The best way to protect your assets is trough a domestic asset protection trust.

The domestic asset protection trust is a trust available in some US states like Alaska and Delaware and it was accepted in order to shield a person’s assets from creditors or other litigations. The concept is based on the fact that creditors can’t reach assets from trusts because they are not in the name of the beneficiary, while he can still have control over them. Normally, all US jurisdictions agree that trusts created for third parties can’t be attacked by creditors. But now, some states (Alaska, Delaware, Rhode Island, Nevada and Utah) allow the creation of self-settled spendthrift trusts. In these states, any person can create a domestic asset protection trust to his own benefit, usually in order to protect his assets from creditors.

Many people misunderstood the concept of creating a domestic asset protection trust and due to its controversy people think that trusts are made only with evil intent. But all jurisdictions have ways of detecting fraudulent transfers and most of the people that have domestic asset protection trust are not making them with fraudulent intent. Because of the laws against fraudulent transfers from the states that allow domestic asset protection trusts, creditors can reach assets that were transferred illegal. The fraudulent intention can be proven if the transfer is made when the assets are already attacked by creditors.

If someone has a lot of debts and creditors are already preparing to initiate a law suit, the domestic asset protection trust is ineffective. Courts agree that trusts made to late are fraudulent and creditors that have debtors in this condition always win. It is important to start a domestic asset protection trust before you are in trouble. People that want to begin asset protection should have no problems with creditors. Any person that cares about their personal assets should start an asset protection plan, because in a potential law suit, any asset can be taken from them. Protection can come with a simple domestic asset protection trust.

When a person starts a domestic asset protection trust, it can be used for everything. It can protect gifts and inheritance, it can help avoiding taxes legally, and it protects assets from claims of future spouses or any other assets that can be taken in a law suit. Some people are more likely to need asset protection planning because of frequent law suits. People that are non US residents usually start a domestic asset protection trust when they want to immigrate because they can still use their assets and they have the possibility of getting funds back in case of a catastrophe.

The cheaper alternative for offshore trusts is domestic asset protection trusts and they can be made by anyone in order to protect their assets. There are other types of protection, but at the moment this is the most popular and it is considered very effective if done properly.

For more resources about asset protection or even about asset protection trust and especially about offshore asset protection please review these links.

About the Author:

For more resources about asset protection or even about asset protection trust and especially about offshore asset protection please review these links.

Article Source: ArticlesBase.com – Benefit From an Asset Protection Trust

Clothing Donations Philadelphia

Question: Know of any 503c clothing donation centers in Philadelphia that give receipts for tax write offs?

Answer: Goodwill, St Vincent de Paul, Salvation Army

Supermodel Karina Bradley Supports GreenFest Philly 2009 and participates in Eco-Fashion Show