NYC Corporate Tax Planners: Rules Businesses need to Follow

Are you ready to do some corporate business tariff planning? It’s not too early or too late to start learning. The key to reduce, minimize or lessen business tariffs is to think logically and with equal opportunity. That is to balance your taxes with your business goals and consider different kinds of tariffs so that you can save money on your overall tax bill.

Most planners only think of business income tariff, but there are other tariffs corporations or businesses need to pay like personal levy. In this article, we will show you some examples of tariff balancing professionals like NYC corporate tax planners are using.

Minimizing the tariffsalong with business and personal costs

Example #1: Tax and Business type

John’s small personal company is making a little profit this year and the planner that he hires suggested that he needs to form a corporation. But, if he incorporates his business, John will need to become an employee of his own company.

As a regular employee, he will be responsible for half of the Federal Insurance Contributions Act taxes like Medicare and Social Security costs. John needs to look at all the necessary tariff that he is paying personally through his company to see what is the best type for his business.

Example #2: Moving your business

John wants to move his company to Miami to take advantage of what he thinks is right for his business since Florida has lower levycompared to states like New York or California.  John knows that Florida has big levysaving since they do not have an income contribution.

But despite the savings John gets with zero income contribution, some costs are higher in Florida. He might save money on his business state income contribution; he will pay more money for vehicles since Florida has higher insurance costs. He may also need to pay more for his business license and other permits and licenses.

To find out about the latest income levy rates and brackets, you can check out https://taxfoundation.org/state-individual-income-tax-rates-brackets-2019.

Example #3: Timing expenses and income at the end of the year

John and his advisers are planning to move some of his business income to next year, but they need first to consider his accounting system, as well as the possibility of lower or higher contributionsthe following year before they make their decision. Here are some list of costs and contributions they need to consider, to help entrepreneurs with their tax considerations and planning of their other costs.

Business income tariff – depending on their business, legal form.

Local and state income contributions- depending on the location of their business.

Business permits and licenses – depending on the location and type of their business.

Employment contribution – while most of these employment taxes are federal, every state has separate employment tax costs.

Self-employment tariff – it can be lower or higher depending on your business’ total income.

Monitor changes in tax laws

The new changes in tax laws from Tax Cuts and the Jobs Act of 2018 will affect every business planning. The new law will include a lower corporate income tariff rate to lower individual contribution rates. But the lower rates are cancelled out by higher standard elimination and deductions of their personal exemptions.

It is an effort at simplification, and it reduces or eliminates the effects of the country’s tariff shields like mortgage interest. Other personal and company tax deductions have been removed or reduced at the very least. One possible advantage to small businesses that are not incorporated is a 20% levy cut on the owner’s business net income aside from the typical business deductions.

You need to check if the possible deductions will have a benefit for startups and small businesses. To make sure that you are up to date will all the changes that are happening in the country, you need to do your due diligence and research everything tariff-related. For example, do some research about the changes in Trump Tax Plans and how it can affect the levy shields that your company is considering.

To know more about tax cuts, click here.

An organization or company is a tariffsaving tool

An adequately organized business levy record is vital to reduce or minimize the tariffs the owner is paying. If you have records of all the expenses your company has made over the years, including but not limited to small items, you can add them to the business tariff form and minimize your profit for the year. Having organized records is crucial in accounting for meals, travels or entertainment expenses. Without these records, you risk your company being denied of any deductions if the government decided to audit your business.

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