Should Your Business Be a C Corporation or a Pass-Through Entity?

business work on computer

The Tax Cuts and Jobs Act (TCJA) introduced a flat 21% federal income tax rate for C corporations for tax years beginning in 2018 and beyond. Under prior law, profitable C corporations paid up to 35%. This change has caused many business owners to ask: “What is the optimal choice of entity for my start-up business?”

 

Choosing the Optimal Business Structure

Under prior tax law, conventional wisdom was most small and midsize businesses should be set up as sole proprietorships, or so-called "pass-through entities," including:

  • Single-member limited liability companies (LLCs) treated as sole proprietorships for tax purposes,

  • Partnerships,

Succession Planning Insights for Transportation Company Owners

transportation profession working on business succession planning

As a transportation company owner, the decision about how and when to sell your business will be one of the hardest you will ever make. It will also be one of the most important. Maybe you have children or other family members who will continue the business. Maybe you have already been approached by an interested outside party.  Whatever your succession plan, there is potential for significant income, gift and estate taxes related to the sale of your business. This could mean business assets being sold to pay these taxes, leaving little for your beneficiaries. Business succession planning must include ways to continue your business and to do so with the smallest possible tax liability.
 

New Study Reveals Costs, Means and Ways to Stop Fraud

Would you leave the front door unlocked to your business? Of course not. That would give thieves easy access to your assets. Yet a surprising number of organizations do not have strong antifraud controls in place to protect against dishonest people inside their organizations. And theft from insiders — also referred to as "occupational fraud" — can be costly.

Fraud losses vary significantly, depending on the nature of the scam and how soon it is detected. Globally, the median loss is $130,000, according to the findings from the 2018 Report to the Nations on Occupational Fraud and Abuse by the Association of Certified Fraud Examiners (ACFE). Here is a closer look at who was affected and how much was lost, as reported in the latest version of this biennial study.

Spring Cleaning: Recordkeeping Guidelines to Save or Shred

Filing storage for record archive

Are you a recordkeeping pack rat? Many individuals and businesses hold onto paper and digital records indefinitely — just in case. But securely storing years of financial records can become burdensome. Here is some guidance to help minimize recordkeeping overload.

Secure Disposal of Sensitive Data

Think twice about keeping certain financial records indefinitely. The more records you store, the greater the likelihood your data will be stolen or hacked. Destroying sensitive documents can reduce the chances you or your company's employees and customers will become identity theft victims.

Expanded Tax Breaks for Business Vehicles

driver behind the wheel of a vehicle

The Tax Cuts and Jobs Act (TCJA) expands the first-year depreciation deductions for vehicles used more than 50% for business purposes. Here is what small business owners need to know to take advantage.

Prior-Law Allowances for Passenger Vehicles

The new expanded deductions represent a major improvement over the prior-law deductions. Under prior law, used vehicles were ineligible for first-year bonus depreciation. In addition, the depreciation allowances for passenger vehicles were much skimpier in the past.

For 2017, the prior-law allowances for passenger vehicles were:

Tips to Help Improve Cash Flow for Small Businesses

One of the biggest challenges facing small businesses is maintaining adequate cash flow. Even in periods of growth, it is imperative to monitor your company’s cash inflows and outflows.  If you are not monitoring your cash activity, you could be almost out of business and not even know it.  Here are some quick and easy tips to help improve your cash flows.

Transportation Industry: Keep Your Fleet Safe and Save Money

truck driver on the road

Whether your company has one vehicle or dozens on the road, smart management can save you money. Familiarity with tax laws, simple maintenance steps and high-tech solutions can reduce the costs of operating your fleet and keep it safer.

Start With Taxes

One of the best ways to save money is to spend some time with a financial professional. Deductions can make a major difference in the cost of operating a fleet, particularly in the first year of ownership. Smith Schafer has the experience and understanding of the transportation industry to make a lasting positive difference in your future success. Our Transportation Group, comprised of numerous professionals, is committed to serving over 80 Minnesota transportation entities.

What Entity Should You Choose for Your Business?

small business owner working at desk

One of the most important decisions you will make when starting a business – determining the legal structure. This may affect the way you run your business. It could influence how you engage in business transactions, protect yourself against liability and minimize tax.
 

Here are some advantages and disadvantages of each business type:

 

The Income Approach to Valuations

The words “Business Value” or “Business Valuation” by themselves hold more than a singular definition. The complexity of business valuations, make it challenging to fully grasp what is involved in the process of valuing a company. There are three main approaches when establishing a value for a company:

4 Ways to Prepare for a Business Valuation

Ready to sell your business? Or planning to keep the business in the family by gifting ownership to a relative? Whatever the reason may be - estate planning, mergers and acquisitions, litigation support, equity or debt financing, or marital dissolution - it is vital to engage experienced professionals and prepare for a business valuation.

We work with business owners to help determine their company’s values relative to their situation or business plan. We take a comprehensive view of all you have invested in your business and what you have created. Below are four items we review during the process and what you can do to prepare your business.

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