Stop Creating LLCs and Trusts to Save Taxes
|
A lot of business owners come to me asking about LLCs, trusts, S Corporations, and other strategies they've heard can help them save on taxes. The truth is this: An LLC by itself does not help you save on taxes. A trust by itself does not save you taxes either. Those are legal structures, and their tax treatment depends on how they are set up, used, and specific facts of your situation. Those are not one size fit all or copy and paste strategies. That's why when you become a new client, we don't start by immediately adding entities or creating complicated strategies. We start with the foundation. Before I recommend ways to reduce your taxes, I need to make sure your current tax situation is accurate. That means reviewing what has already been filed, making sure income and expenses were reported correctly, identifying mistakes or missed opportunities, and confirming that your existing entities and tax returns are being treated properly for tax purposes. There is no benefit in creating another LLC, setting up a trust, or implementing an advanced tax strategy if the foundation underneath it is wrong. Sometimes the biggest opportunity isn't adding something new. It's correcting what you already have. My goal is to make sure we:
Tax planning is much more effective when we know the numbers, entities, and returns we're starting with are correct. Before you add another LLC or trust because someone told you it would save taxes, make sure you understand exactly what it does and doesn't do. If you're looking for a new tax strategist that will help you prevent and solve tax problems, schedule your appointment using the link below. Warm regards, Karitsa Kerns, CPA, EA
I help private practice owners heal costly tax problems, reduce taxes legally, and prevent future tax issues with proactive tax strategies and expert tax resolution. DEADLINES September 15th -
October 15th -
|
Welcome to the KNK Tax & Accounting Blog
Have you ever been shopping during a sale, gotten to the register, and the cashier says: “Actually, I can give you another 25% off.” It wasn’t advertised. You didn’t know about it. But the cashier did. Would you say, “No thanks. I’d rather pay full price”? Of course not. Yet private practice owners do something similar with taxes all the time. They wait until tax season to talk to a tax professional. They get hit with a large tax bill and immediately start figuring out how to pay it. Or they...
Running a profitable private practice does not automatically mean you are paying the lowest amount of tax legally required. In fact, many private practice owners overpay—not because they did anything wrong, but because their tax strategy has not kept pace with the growth of their practice. Here are five common reasons: 1. Your business entity no longer fits the practice The entity that worked when your practice first opened may not be the most tax-efficient structure now. As revenue and...
The IRS recently announced a change that could make it easier for some taxpayers to get penalty relief. Starting this summer, the IRS will begin automatically removing certain penalties for taxpayers who have a strong history of filing and paying on time. In the past, you generally had to contact the IRS and request the First Time Penalty Abatement. Under the new process, called the Automatic Exemption from Penalty, eligible taxpayers will not have to ask. You may qualify if you filed your...