There are many reasons business owners close up shop, including retirement, starting a new venture or, hopefully, because they’ve won the lottery. No matter what the reason, it’s important to diligently wind down a business before dissolving your business.
Here are five steps to take:
There are many reasons business owners close up shop, including retirement, starting a new venture or, hopefully, because they’ve won the lottery. No matter what the reason, it’s important to diligently wind down a business before moving on.
Whether dissolving your business is a happy or sad occasion, it should be handled thoroughly. Failing to wrap up all loose ends can lead to years of frustration and possible litigation with former employees, vendors, and partners. We’d be happy to help you wrap things up and move on to your next venture. Call us at (480) 776-6055 today.
If you’ve been appointed an executor of a loved one’s estate, or a successor trustee, and that person dies, your grief – not to mention your to-do list, including tasks ranging from planning the funeral, coordinating relatives coming in from out of town and (eventually) meeting with a trust administration or probate lawyer – can be quite overwhelming. First and foremost, take care of yourself during this emotional time.
To help you with the “business” end of things, here’s a quick checklist of crucial details that will make the trip to our office to handle the legal affairs easier. I know it can be difficult, but some of these things have a deadline, so make sure that you reach out sooner rather than later:
You may be thinking about handling all the paperwork yourself. It’s a tempting thought – why not keep things as simple as possible? – but a “DIY” approach to this process might cost you and your family dearly. Read on to understand why.
Consequences of Mishandling an Estate: Examples from Real Life
Example #1: Failing to disclose assets to the IRS. Lacy Doyle, a prominent art consultant in New York City, inherited a large estate when her father passed away in 2003. He allegedly left her $4 million, but she only disclosed fewer than $1 million in assets when she filed the court documents for the estate. Per the New York Daily News: “She opened an ‘undeclared Swiss bank account for the purpose of depositing the secret inheritance from her father’ in 2006 — using a fake foreign foundation name to conceal her identity… [she also] didn’t report her interest in the hidden accounts — nor the income they generated — from 2004 to 2009.” As a result of these alleged shenanigans and Doyle’s failure to report the accounts to the IRS, she was arrested, and she now faces a six-year prison sentence.
Example #2: Misusing power of attorney. Another famous case of an improperly handled estate involved the son of famous New York socialite, Brooke Astor. Her son, Anthony Marshall, was convicted of misusing his power of attorney and other crimes. Per a fascinating Washington Post obituary: “In 2009, Mr. Marshall was convicted of grand larceny and other charges related to the attempted looting of his mother’s assets while she suffered from Alzheimer’s disease. He received a sentence of one to three years in prison but, afflicted by congestive heart failure and Parkinson’s disease, was medically paroled in August 2013 after serving eight weeks.”
Some Key Takeaways
We’re here to help you steer clear of the obstacles and free you to focus on yourself and your family during this difficult time. Call our office at (480) 776-6055 for assistance. We can help you manage estate and trust related concerns as well as point you towards other useful resources.
Forming a business can seem overwhelming – especially when you’re doing it alone. Creating a business plan will allow you to refine incomplete ideas, address areas you may have not yet considered, create a map so you know what to do next, and increase credibility for bank loans or investor funding.
While you may think you’ve got your business concept down pat, turning the idea you wrote down on a napkin into reality isn’t as easy as it might appear and many people get so caught up on how to start the process that the business itself never materializes.
Following this solid eight point plan, based on guidelines from the U.S. Small Business Administration (SBA), will help you get down to business, literally:
It’s likely that you may not even know the answers to these questions. That’s okay. We can help you to refine your goals, map out your plan, provide the kinds of details needed to make your venture a success, and form your business entity.
Are You Prepared to Include the “Wow” Factor?
When forming a business, you may think your business plan is great; but don’t forget that most people think the same of their own business. The Wow Factor becomes especially important when you’re all competing for funding.
Make sure your plan has a “Wow” factor by:
The bottom line is that you want to make your business plan stand out far above the rest – your plan needs to be well thought out, organized, and unique. Even if you don’t need outside funding, complete the business plan so you have a roadmap and the knowledge that you haven’t missed an important consideration.
Let’s Continue This Conversation
If you’re not used to drafting business plans, the task may feel daunting and you may be tempted to jump ahead. Don’t. We’re happy to help you with forming a business plan and make sure you have protections in place so that your business gets off to the right start. And, even if you’re already knee deep in your business, we’ll help you get all of your ducks in a row. Give us a call at (480) 776-6055 and get on our calendar.
To qualify for the QBI deduction, the business must be a qualified business, the definition of which excludes service providers (lawyers, CPAs, doctors, financial planners, realtors, consultants, etc.). However, these excluded businesses receive the QBI deduction if their adjusted gross income does not exceed $315,000 for joint filers, $157,500 for individuals (over which amounts the QBI deduction is gradually phased out). Wages paid to the business owner are not reduced by the QBI deduction. While owners of qualified businesses are not subject to these income limitations, there are other limitations that could apply. The QBI deduction is applied to the aggregate of all business income/loss for all businesses the taxpayer owns, and is limited to: 1) 20% of the QBI for each separate business, and 2) the greater of (a) 50% of the W-2 wages the business owner received from each separate business or (b) 25% of the wages the business owner received from the business plus 2.5% of the qualified property owned by the business. Qualified property is defined as depreciable property owned and used by the business. Qualified property is valued at its original cost basis and remains qualified property over its depreciable life not to exceed 10 years.
The structure of the 2017 Tax Act as it applies to small businesses reflect congressional efforts to incentivize investment into capital assets. The economic effect of which increases demand for assets such as equipment, machines, furniture, and real property. Increased demand results in more manufacturing, which leads to more jobs thereby reducing unemployment; when demand for labor increases, prices for human resources increase leading to higher wages. More production results in an overall growth of our economy and GDP. Further, lowering the tax bill on small business owners will put more money into the hands of middle class Americans which, with more disposable income, results in more spending and investing at the grass roots level. This is clearly a tax plan designed to grow the American economy by lowering the tax bill on small business owners and promoting business investments into property, plant, and equipment.
Because of the way the QBI deduction is allowed and limited, business owners should consider separating ownership of various profit centers. For example, a doctor that owns the building out of which she operates is subject to the QBI income limitation. If the doctor spins ownership of the building into a separate LLC and leases the building back to the medical practice, then the QBI income applicable to the medical practice does not apply to income arising from the real estate leasing entity.
For the foregoing reasons, it’s wise for business owners to visit with their business and tax advisors to review how the 2017 Tax Act will affect them, and to consider reorganization options to maximize their ability to benefit from our new tax laws.