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Business Tax Returns: The Advantages of a Tax Attorney Review

A lot of businesses simply look at the tax returns as “adding numbers.” Yet, tax returns are so much more than that. A tax return is a result of a long series of decisions made by the business, such as elections, classifications, investment strategies, structuring of business transactions, and numerous other actions and inactions. Dealing with this interior constitution of a business tax return from a legal perspective (rather than from a more rudimentary accounting view) is the superior advantage of a business tax attorney.

The advantages of the legal approach to tax returns can be grouped in three classifications. First, an attorney will review a business tax return from a structural perspective, taking into account the temporal element of a business transactions (i.e. comparing the effect of a business strategy throughout different time periods – prior years and future projections) and non-tax business and legal goals. This structural overview is especially effective in advantageous positioning of a tax strategy into the overall legal structure of a business.

This first approach necessarily leads to the second advantage – a business tax attorney will explore an alternative treatment of a given business and/or tax issue and will strive to find a legal solution to a taxation matter. Armed with a deeper understanding of other legal and non-legal goals of a business client, a tax attorney may engage in re-classification of certain business transactions to take better advantage of the contemporary provision of the Internal Revenue Code. In certain situations, an attorney review may even result in filing amended tax returns for prior tax years in an attempt to recapture tax benefits (i.e. receive tax refunds), which were unavailable or overlooked in the past.

Finally, an overview of a business tax return by a business tax lawyer is likely to lead to comprehensive tax planning for the future. In some situations, an overview of a business tax return by a business tax lawyer will result in a recommendation of a complete re-structuring of business transactions in a more tax-advantageous matter while seeking to achieve the same business goals. In others, a business tax lawyer may implement tax deferment and tax reduction strategies centered around purely legal and tax concepts.

Whether your business is small or large, growing or maturing, local or international, retaining the services of a business tax lawyer to overview your business tax return should become your annual practice. The benefits of such overview are usually substantial. In addition to the direct advantages of a better current tax strategy and future tax planning, an overview of a business tax return by an attorney may lead to completely unexpected and important discoveries about the legal and tax situation of your business – the legal issues that were overlooked in the past, but could have grown into severe problems in the future had it not been for their timely discovery.

Sherayzen Law Office can help you review your business tax returns and create responsible and tax effective strategies for the current and future tax years. Call NOW to discuss your business tax return(s) with an international business tax lawyer!

Importance of Determining Your Tax Filing Status

Figuring out your filing status is the first major step in filing your tax return. Your tax filing status not only will allow you to determine the correct tax (from the Tax Computation Worksheet or appropriate column in the Tax Table), but also it is crucial to understanding your eligibility for and the exact amount of deductions, exemptions, tax credits. For example, in some situations, if your taxable income is close to $160,000, the choice between filing as “single” and filing as “married filing separately” may influence whether you need to pay the alternative minimum tax (“AMT”); it is more likely that filing as “single” will help you avoid AMT, while “married filing separately” status may have the opposite effect. Sometimes, the latter tax filing status may also make you ineligible for certain tax credits even at a much lower income bracket – a situation that may be avoided if you are filing joint tax return with your spouse.

There are five possible tax statuses: 1) single; 2) married filing jointly; 3) married filing separately; 4) head of household, and 5) qualifying widow(er) with dependent child. The benefits and drawbacks of each status differ greatly depending on a tax situation. In some cases, you may be eligible for more than one status (for example, single and head of household); in other cases, your eligibility may be greatly influenced by the choices you make.

In order to draw out the benefits and avoid costly mistakes, careful tax planning is necessary. The Internal Revenue Code (“IRC”) is so complex that it requires a tax professional to fully understand its provisions. Tax attorneys are professionals who usually are in a much better position to legitimately utilize possibilities offered by the IRC.

Sherayzen Law Office is a law firm that offers individual and business tax services. We can help you understand your current tax position, file the tax returns for you, and carefully plan your tax strategies for the future. CALL NOW to start resolving your tax issues!