Tax Works

Tax Planning - A Process Not an Event

     Everyone dreads tax season.  It is a busy and hectic time for all of us but mostly for tax professionals.  Waiting until the busy season for an annual meeting can result in lost tax saving opportunitites.  

     The best way to lower your tax bill is to start planning now.  This seems like odd advice since we just finished filing or maybe getting an extension on our 2008 return.  However, the greatest benefit of tax planning is derived from a prospective approach.  If one of your goals is to lower your tax bill, talk to your professional about what you can do now for the 2009 tax year.  If you have a preparer that does not have ideas about how you can save taxes, consider discussing your situation with another tax professional.

     If you have questions or  would like to discuss your situation, call me at (678) 522-9253 or e-mail me at wesleykenthill@gmail.com.

Wesley Kent Hill

Choosing Your Form of Business

     A  common question posed to both CPAs and attorneys is how should I organize my business and should I incorporate.  The answer used to be simple.  It depends.  The answer has now changed.  Now the answer is maybe. Perhaps a discussion of these answer is in order.

    The form of business selected will impact both the legal and tax liability of the entity and its owners.

    In terms of legal liability  the three alternatives are:

• Sole Proprietorship
• Partnership
• Corporation

     A sole proprietorship has one owner, a partnership has two or more owner's and a corporation can have one or multiple owners.  As far as legal liability goes, the only business form that provides some form of protection from legal liability to its owners is the corporation.  Setting up a corporation is almost a no brainer when the business owners want protection from creditors and other potential clamaints, for their personal assets.

     The choice of business form will also drastically impact the income tax of both the business and its owners.  Unless you are extremely savy in the area of taxation, it is best to get professional advice with this choice.  Each type of entity has its own set of advantages and disadvantages when determining which entity type is best.  In recent the IRS have established hybrid forms of business that allow the tax advantages of being a sole proprietor or partner with the liability limitations of a corporation.

Your CPA or your attorney should be able to help you navigate this and other business decisions.

Wes Hill, JD, CPA  (678) 522-9253