Tax – Page 4 – AmeriLawyer – Incorporate, Trademark & Asset Protection

Be Aware Of Your Rights When Dealing With The IRS

January 25, 2016 Spiegel & Utrera, P.A.

In a recent matter with the IRS, a business owner had paid a balance due in full for a business tax debt; however, the IRS had used the payment to offset another liability that the business had incurred.

In situations such as these and in order to ensure that taxpayers are aware of their rights when disputing IRS actions, the agency has released a Taxpayer’s Bill of Rights. Int the business taxpayer’s situation, it is critical to indicate to what debt a payment should be attributed; otherwise, the IRS will designate the payment to any liability that serves the IRS’s interest, such as penalties and interest.

we-the-people — We The People – Be Aware of Your Rights

It is important, therefore, to be aware of your rights when dealing with IRS decisions as a business owner. These include:

The Right to Be Informed
The Right to Quality Service
The Right to Pay No More than the Correct Amount of Tax
The Right to Challenge the IRS’s Position and Be Heard
The Rights to Appeal an IRS Decision in an Independent Forum
The Right to Finality
The Right to Privacy
The Right to Confidentiality
The Right to Retain Representation
The Right to a Fair and Just Tax System

While many issues can be resolved via a phone call to the IRS or a visit to the nearest taxpayer assistance center, more serious disputes can be addressed through an independent forum. These include the Taxpayer Advocate Service (an independent organization within the IRS), the office of Appeals, and the U.S. Tax Court. Representation is strongly encouraged when pursuing an appeal to ensure that your business interests are zealously advocated.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have any tax related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Where Are The Jobs Going To Come From?

January 21, 2016 Spiegel & Utrera, P.A.

If our presidential candidates are telling you that small businesses will lead to more jobs, you may want to continue reading…

A census survey showed that the number of small businesses without employees increased by .04% totaling approximately 72.72 non-employers for every thousand residents. The average sales by these businesses, on the other hand, decreased by approximately 0.2%. The survey suggests that the supply products offered by these non-employee businesses exceeds the demand or, alternatively, that small businesses start up without offering any products for market. Though the ADP national employment report shows that private sector jobs rose by approximately 182,000 jobs in October 2015, small business job creation was down one point from the previous month.

Analysts suggest that while these small, non-employer businesses offer an economic function, their increasing number, combined with less than 4% of all business revenue, leads to a greater spread and, therefore, diluted revenue for these companies.

IMAGE DISTRIBUTED FOR AMERICAN EXPRESS OPEN - The owner of Merz Apothecary in Chicago prepares for the increase of traffic expected on Small Business Saturday after a front window makeover thanks to designer Simon Doonan. (John Konstantaras / AP Images for American Express OPEN) — Small Business Owner

The census data accounts for the increasing number of non-employer businesses as part-time endeavors by self-employed people or full-time workers engaged in on-the-side, self employed business activity. For those small businesses that do seek to become employers, the inhibition to do so stems from factors such as high costs for benefits, health care, and wages.

In conclusion, our presidential candidates need to outline a plan to curb the high costs of employee benefits and employee healthcare for the small business owner. Lowering these costs may lead to additional hiring by the small business owner. In turn, hiring new talent may lead to more sales, more projects, and, thus, growth!

TAKE MATTERS INTO YOUR OWN HANDS!
While government tries to figure out a plan to lower the costs for the small business owner, Larry Spiegel, continues working with entrepreneurs to start and grow their business! Listen to Larry’s radio show, “Start, Expand, Buy, Sell Your Business”, episodes for a common sense approach to starting and growing your business. Spiegel provides sound advice based on decades of attending the school of hard knocks, bootstrapping his way to the top.
Listen Here!

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills, Trusts, Agreements & Leases, Corporate & Company Changes.

Foreign Accounts Being Reported To IRS

January 19, 2016 Spiegel & Utrera, P.A.

The Foreign Account Tax Compliance Act (FATCA) is just the latest manifestation of a long tradition of international cooperation for law enforcement and tax collection purposes, specifically contained in various Tax Information Exchange Agreements that the U.S. has signed with a multitude of other countries. FATCA imposes a 30% withholding requirement on payments from the U.S. to any Foreign Financial Institution that has not registered with the IRS and agreed to follow certain procedures for detecting and reporting accounts held by U.S. taxpayers. In order to improve tax compliance and implement FATCA, the U.S. has entered into Intergovernmental Agreements that essentially require treaty partners (FATCA Partners) to adopt FATCA as their national law.

Two types of U.S. accounts are subject to FATCA reporting and are referred to as “Reportable Accounts”. The first type is a Depository Account held by an individual who is a resident of a FATCA Partner country and that receives more than $10 of interest in any given calendar year. Depository Accounts are basically checking, savings, certificates of deposits and similar types of accounts, including certain interest-bearing insurance investments. The other type of Reportable Account is a Financial Account held by a resident of the FATCA Partner country, including entities that certify that they are resident in the FATCA Partner country for tax purposes. A Financial Account is basically any account maintained at a Financial Institution. U.S. citizens and tax residents, living in the U.S. or abroad, who have accidentally or intentionally failed to report income, bank accounts, corporations, trusts or other assets outside the U.S. are increasingly at risk of being detected, fined and in some cases even incarcerated and deported. Anyone unsure whether they have fulfilled all their tax and information reporting obligations should seek the privileged advice of a U.S. tax attorney as soon as possible to determine the safest and most economical way of resolving their non-compliance prior to detection.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have more questions about foreign accounts, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Are you an accountant? Get listed in our online accountants list as well as our accountants published paper insert that is included with every new business formation. To be inlcuded in our list, free of charge, email us your business contact details at accountants@amerilawyer.com

What You Have To Do Next After You Win $1.4B Powerball

January 13, 2016 Spiegel & Utrera, P.A.

As you work hard and commence to acquire assets and invest in different things, it is often a chilling thought to imagine something happening to you and what is to then happen to your assets and your loved one’s access to these assets.

Many times poor planning leads to loved ones having to spend too much money attempting to marshal and probate someone’s estate, because the person either did not even have a will or passed away with only a will, which requires a probate be established in the competent court.

“A trust is an arrangement where either money, real estate or other assets are transferred from the settlor, many times while the settlor is still alive, to be managed and administered for the benefit of another pursuant to the terms of the trust agreement”

A revocable living trust is where the trust is created during the settlor’s or grantor’s lifetime and can normally be changed and modified during the settlor’s or grantor’s lifetime. Generally, the revocable living trust is created by a written document, known mainly as a trust instrument or trust agreement. The funding of the trust should occur at the same time or shortly thereafter. Funding or vesting requires assets to be transferred into the trust.

Many times the grantor or settlor, the creator of the trust, and the trustee and the administrator of the trust are the same individual, and the grantor or settlor has the right to amend or revoke the trust.

The primary reason to consider using a revocable living trust is to avoid the sometimes lengthy and expensive probate process which many will be subject to when their loved one passes with or without a will only. The trust provides that in the event of the grantor or settlor’s incapacity, mental or physical, or death, the successor trustee takes over the administration of all trust property.

The most important or popular reason for its use is the avoidance of probate upon the grantor’s or settlor’s death. Probate is avoided because the Trust assets are owned by the trust rather than the grantor or settlor.

Do you have any questions about trusts? It is important that you have a well drafted trust. Speak to one of our attorneys by calling 800-743-9900 or visit our website www.AmeriLawyer.com today!

Which Entity Does NOT Pay Federal Taxes?

January 5, 2016 Spiegel & Utrera, P.A.

When the time comes to hand the IRS your money, it’s no secret that the byzantine tax code they have created is built for confusion over efficiency. Here are some things every entrepreneur should know about filing taxes for an LLC:

First, unlike a Corporation, an LLC is a pass-through entity – this means that the company itself will not have to pay any federal taxes at the company level. The individual members will pay taxes or any distributions they receive from the LLC. If the LLC has only one member, you will be taxed like a sole proprietorship. This means that you will figure your profits and losses on IRS Form 1040, Schedule C when you file your personal income tax return.

However, if your LLC has multiple members, you will be taxed as a partnership. Each member will report their profits on IRS Form 1040, Schedule E when they file their personal tax return. The partner’s share of profits and losses should be clearly defined on a well-drafted Operating Agreement in order to avoid conflict. In addition, the multi-member LLC must distribute a Schedule K-1 to each member in order to show that member his or her share of LLC income.

Always check with your State’s tax collector for any “franchise taxes.” These are additional state taxes imposed on LLC’s that reach a certain income threshold.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and you need assistance filing your LLC taxes, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Be Careful With Your Self Directed IRA Or Else

November 18, 2015 Spiegel & Utrera, P.A.

Self-directed IRA’S are commonly used vehicles for investing IRA funds into assets without having to immediately pay taxes on the funds used for investments. These IRA-owned LLC‘s operate out of a business checking account with the “Manager” of the LLC (also the IRA account holder) being the authorized signer on the account. If the account holder is not extremely careful, the self-directed IRA may create major tax and legal problems. Specifically, tax-exempt status may no longer be afforded to the IRA and the entire value of the IRA may be treated as taxable to the account holder, including possible interest and penalties.

Ensuring that the account holder does not engage in, what the IRS considers, “prohibited transactions” is key to avoiding these potential issues. Generally, the self directed IRA shall not interact, or transact matters, with “disqualified persons.” Disqualified persons include, but are not limited to, the IRA account holder; the account holder’s spouse; lineal descendants, lineal ascendants, and spouses of these persons; and, business entities owned 50% or more by these people. It is important to note that any direct or indirect interaction, and even minor transactions, between the IRA and a disqualified person may result in the complete taxation of the IRA.

Visit our website for more information and to make sure your interests are protected!

Email: info@Amerilawyer.com

Misclassifying Workers Can Lead to Costly Penalties

November 5, 2015 Spiegel & Utrera, P.A.

Avoiding payroll taxes by intentionally or unintentionally misclassifying employees as independent contractors is a costly mistake.

Most often the misclassification will be discovered during an audit or if a former worker files a complaint. Under “the twenty factor test” in Revenue Ruling 87-41, an employee is anyone who performs services for an employer if the employer can control what will be done and how it will be done. However, in an independent contractor relationship the employer has the right to control or direct only the result of the work done, and not the means and methods of accomplishing the result.

How to properly create an independent contractor relationship?

Foremost, you must have an independent contractor agreement in place. This will help define the responsibilities of the indepependent contractor to follow proper standards under the law. Next, the independent contractor should set up his own corporation or LLC. Then the independent contractor relationship is between two entities. This helps the employer prove he is not controlling methods to accomplish the result. To help understand how to create an independent contractor relationship, speak to one of our specialists at (800) 603 – 3900 or visit our website today!

Franchising: A Simpler Path If You Can Avoid The Pitfalls

October 29, 2015 Spiegel & Utrera, P.A.

The recent recession and subsequent slow recovery have steered more entrepreneurs towards franchises.

The boom in franchises means more opportunity, but not all buyers are getting an accurate picture before taking the plunge. Because there is no central regulation over franchising, disclosure statements are often used to confuse buyers into more restrictive terms. For example, franchisers are getting kickbacks for these arrangements. Furthermore, franchisees can only go to arbitration. In some cases the franchise agreements will shorten the statute of limitations meaning the franchisee cannot bring any legal action.

Despite the risks, franchising is a proven business model

Before you enter into a franchise agreement, it must be reviewed by an attorney familiar with the franchise industry. Also, buyers must have thorough due diligence done to determine whether the franchise can be successful. Buying a franchise is one of the largest investments you will ever make, so it shouldn’t be take lightly. If you already own a franchise, or you are thinking of purchasing one, then contact the Spiegel & Utrera, P.A. General Counsel Club at (800) 743-9900.

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Two Ways To Raise Money For Your Business You May Not have Considered

October 28, 2015 Spiegel & Utrera, P.A.

When starting a business, among the most common methods that are thought of to raise money for the business are a business loan from a bank, credit cards, money from savings or a second mortgage on a home. The 2 ways listed below are some that may not have been considered.

Crowdfunding. In a crowdfunding situation, you would present the idea for your business on a crowdfunding website. The public would then decide if they would like to contribute to your business by providing money. Typically crowdfunding sites allow for people who donate to a business to receive a “reward” for investing. Kickstarter and Fundable are among the more popular crowdfunding websites.
Business Partner. Many companies receive money for their business from a business partner. Choosing a business partner is something that should be done with great care to ensure that the business partner’s goals are in sync with yours. It is also important to have all the proper agreements drafted such as a buy out agreement and operating agreement in place when the business is getting started. Having the agreements in place prior to any disagreements could pay off greatly down the line.

If you are a member of Spiegel & Utrera, P.A.’s General Counsel Club and have business related questions, call (800) 734-9900 or clubassist@amerilawyer.com for assistance. Remember, as a member of the General Counsel Club, you receive unlimited legal, business, credit and tax advice all year long.

Spiegel & Utrera, P.A. is a corporate law firm with its main offices located in Miami, Florida with offices throughout the United States. As a law firm, we do more than just help you form your business entity. We stand ready to help with the maintenance of your legal business entity! We will assist you with Incorporation Service, Trademarks, Copyrights, Estate Planning, Legal Counsel, Wills,Trusts, Agreements & Leases, Corporate & Company

Seven Powerful Reasons to Incorporate or Organize an LLC

October 21, 2015 Spiegel & Utrera, P.A.

1. Protect yourself from personal liability

Corporation or LLC signs lease – you’re not personally liable
Corporation or LLC borrows money – you’re not personally liable
Corporation or LLC buys goods and services on credit – you’re not personally liable

2. Business Tax Deductions

According to Judge Learned Hand, “any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes. Gregory v. Helvering, 69 F.2d 809 (2nd Cir., 1934).” Furthermore, the Supreme Court stated that “[t]he legal right of a taxpayer to decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” Gregory v. Helvering, 293 U.S. 465 (1935).

Entrepreneurs will want to attribute as much of their expenses as possible to reasonable and necessary business expenses. Why pay more taxes than necessary? Many taxpayers overlook legitimate deductions for business expenses. To the extent possible, entrepreneurs will want to ensure to deduct the following business expenses:

Vehicle expenses are deductible if they are attributable to a business use. An individual taxpayer cannot claim a corporate expense, it is an expense of the corporation. Automobile lease payments are deductible if they are ordinary and necessary expenses of a trade or business directly attributable to the operation of a trade or business.
Travel expenses are deductible to the extent they are reasonable and necessary expenses incurred in the conduct of a trade or business directly attributable to the trade or business. Townsend Industries, Inc. v. U.S., 342 F.3d 890 (8th Cir. 2003). Thus, a corporation could hold an annual meeting for its shareholders and directors in a distant city.
Start-up and organizational costs, at the taxpayer’s election, may be treated as deferred expenses and allowed as deductions prorated equally over a period of not less than 60 months, beginning with the month in which the active trade or business, corporation, or partnership begins.
Certain types of entertainment expenses may be deducted, such as food and beverages provided for employees on the business premises, recreational expenses for employees, expenses of certain business meetings, and items sold or made available to the public.
Attorneys’ fees, court costs, and other legal and accounting expenses may qualify as ordinary and necessary trade or business expenses.
Rent for the use of property to which the corporation has no title and in which the corporation has no equity can be deducted as a trade or business expense if the rent is paid in connection with the corporation’s trade or business, is ordinary and necessary, and is paid or incurred during the taxable year. If the property on which the rent is paid is used for both business and personal purposes, only the portion allocable to business use is deductible. If the corporation leases office space at the residence of an officer or director, for the rent to be deductible the office space must be exclusively used for business purposes on a regular basis and be the principal place of business of the corporation.
Expenditures for incidental repairs, maintenance, replacement, and improvements may be deducted as ordinary and necessary business expenses.
The cost of materials and supplies used in a corporation’s trade or business generally is a deductible business expense.
Interest and other borrowing charges incurred in the course of a trade or business are deductible.
In general, state local and sales taxes that are ordinary and necessary corporation expenses paid or incurred in carrying on the trade or business are deductible.
Salaries and other compensation for personal services actually rendered may be deducted as an ordinary and necessary trade or business expense. To be deductible, compensation payments must be reasonable and must be actually paid as compensation (rather than as dividends).
The cost of insurance may be deducted as a business expense if the insurance is connected with the corporation’s trade, business, or profession
Advertising costs related to a corporation’s business generally are deductible as an ordinary and necessary business expense.
A rebate of a portion of the purchase price to a customer generally is deductible as a business expense.
Payments to charitable organizations that bear a direct relationship to the corporation’s business and that are made with the reasonable expectation of a financial return commensurate with the amount of the donation may be deductible as business expenses. For example, a retail store might set aside a percentage of its sales for donation to local charities as part of a promotional campaign and thus be entitled to a business deduction for the donations.
Setting up a reserve account can create a legitimate tax deduction. Midas Muffler warrants its muffler for as long as the purchaser owns the vehicle on which the muffler has been installed. If the muffler fails to perform properly during the warranty period, Midas will install a new, warranted muffler on the vehicle, and the muffler owner will not be charged for the muffler, only for the labor required to install. You may be interested to know Midas Inc. (the muffler company) recorded $38.5 million in charges to reflect its estimated liability associated with outstanding warranties in the U.S. and Canada. On a going forward basis, Midas will accrue for the expected future cost of warranty redemptions at the time of the original installation of the warranted part. See Midas Inc.’s 10-K here. What does this mean? Midas is claiming such warranty reserves as a business deduction! Other entrepreneurs are bound to take note and offer long-term warranties for their products and claim a business deduction.

3. Minimize IRS Audits

Sole proprietors must file an IRS Form 1040, Schedule C (Profit or Loss from a Business). Unfortunately, the IRS audits sole proprietors that file the form at a higher audit rate than returns for an incorporated micro business. Also, sole proprietors with home office deductions face even more risk of audit by filing the IRS Form 8829 (Expenses for Business Use of Your Home) for home office deductions. S or C corporations avoid such scrutiny. See Shelter Your Small Business from Tax Audits.

4. Privacy

The Corporation or LLC can be established in such a way so that shareholder/owners remain anonymous, many times the same anonymity can be accomplished for officers and directors.

5. Use of a Marketing framework

Hold the business out to all as a Corporation or LLC
Give the business the appearance of being much bigger than it is
Attract investors more easily

6. Raising capital

Because of the ease of transfer of ownership and the “separate entity” concept of the Corporation or LLC, it is much easier to attract investors than otherwise.

7. Easy transfer of ownership

Put real estate in Corporation or LLC and transfer through private agreement, i.e. stock transfer rather than formal real estate transfer and closing.
Re-title asset to a Corporation or LLC yet continue to maintain control.

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