Category: LLC Tax Savings

Using CARES Act to become a time traveler

In his science fiction masterpiece, The Time Machine, H.G. Wells wrote: “[i]t is a law of nature we overlook, that intellectual versatility is the compensation for change, danger, and trouble.” Essentially, the line is a less pithy (and, arguably, more nuanced) version of Nietzsche’s “what doesn’t kill you makes you stronger.” And, like all true aphorisms, the poignance of Wells’ observation from the late nineteenth century transcends Time itself. Inarguably, the turmoil engendered by the Virus and the subsequent economic shut-down has given us a world that is replete with “change, danger and trouble”. And, for those select, informed few whose “intellectual versatility” has strengthened amidst the din, a wide portal to economic opportunity has opened.

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How to Help Our Fellow Citizens in Puerto Rico

More than seven months after Hurricane Maria hit Puerto Rico, the island is still experiencing the effects of the storm’s devastation.  Just recently, residents experienced another island-wide power outage (  Despite difficult terrain and budget issues, Puerto Rico is striving to rebuild in the wake of the hurricane.

At Tax Law Solutions, we have a special place in our hearts for Puerto Rico.  Our business is headquartered there (we also have an office in Illinois), and most of our team members are residents on the island.  Puerto Ricans are strong people, and as fellow U.S. citizens, there are many ways we can offer support to help them rebuild.  Below there are two examples of charitable organizations.

Unidos Por Puerto Rico

Founded by the first lady of Puerto Rico, Unidos provides assistance to individuals and small businesses devastated by Hurricanes Irma and María.  Unidos accelerates recovery by supporting needs of shelter, food and health to help rebuild lives and communities in Puerto Rico.

Hispanic Federation

Hispanic Federation (HF) is the U.S.’s premier Latino non-profit membership organization.  Founded in 1990, HF seeks to support Hispanic families and strengthen Latino institutions through work in the areas of educationhealthimmigrationcivic engagementeconomic empowerment, civil rights, organizational development, and the environment.  One of their special incentives is Disaster Relief Assistance.  You can specify Puerto Rico Hurricane Relief with your donation.

A donation can also be a win-win situation, by helping Puerto Rico and also reducing your tax liability.  It’s TLS’s mission to help you create a plan that will maximize your wealth so you can build a more secure future.  If you’d like to learn more about reductions to your tax liability, please get in touch with TLS for a complimentary analysis!


Own an S-Corp? Consider These Three Questions for Tax Year 2018

The 2017 tax year has come to a close, and the new “Tax Cuts and Jobs Act” (TCJA) is officially in effect as of January 1, 2018.  If you own any company organized as a pass-through entity (Noncorporate business), you may be thinking you’re in the clear for 2018 – surely you’ll be paying a lot less in taxes this year, right?  Well, that may not be true as some of the deductions you may have utilized prior to this year have been phased out.  If you’re hoping to minimize your tax liability and retain more revenue this year, you might want to consider the following questions:        Continue reading “Own an S-Corp? Consider These Three Questions for Tax Year 2018”

How Manufacturers Can Maximize their Wealth

If you own a business that manufactures a product, you may be wondering which options are available to maximize your wealth, optimizing your business structure, and minimizing your tax liability this year – and in the future. After all, by retaining more of your income, you’ll be able to reinvest in your business, leading to more growth and stability for you and your employees.

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You’ve probably been hearing a lot about the new tax bill Congress passed at the end of last year. The majority of business owners believe they just received a huge tax cut and that, in the years to come, they will have more liquidity to do with as they please. Unfortunately, many will most likely see a reduction of less than 5% in their tax liability.


Corporate Taxes

Debt vs. Equity?

How is your practice set up?

Is it a C corporation, or a flow through entity, S corporation, Limited Liability, or Partnership?  Or are you a sole proprietor?

If a C corporation, the reason this simple question is important, is that payments of dividends are not deductible by a corporation, but the payments of interest are deductible.  Therefore, the payment of interest reduces corporate taxable income, and corporate income tax, whereas the payment of a dividend, being non deductible does not decrease corporate taxable income and does not reduce corporate income tax.

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LLC Tax Savings


Changing The Status Of Entities

Organizations that are eligible and wish to change their classification may do so by filing an election.   Once the classification has changed, the organization must keep that classification for at least five years.

Potential Tax Impact on Changing Classification

A change in tax classification will have tax consequences.

Corporation Status Elected

When a partnership elects to be classified as a corporation, it will be considered to have contributed all of its assets and liabilities to the corporation in exchange for stock in the corporation. 23  The partnership is deemed to liquidate by distributing stock in the corporation to its partners.

Continue reading “ADVANCED TAX ISSUES FOR LLC’S – Part 2 of 10”


Examination of the Check-the-Box Regulation

Effective January 1, 1997, the IRS issued final regulations that implemented the entity classification system.  These “Check-the-Box” rules allow unincorporated organizations to elect to be treated as either corporations or partnerships for federal income tax purposes.  Certain business entities that are excluded from these rules are corporations organized under state statutes, foreign entities that resemble U.S. corporations, entities taxable as corporations under special Code provisions, and trusts. 1

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