Tax attorneys are professionals that many people only interact with intermittently. It's not uncommon for folks to lean on non-lawyers, especially accountants and tax preparers, a little too heavily when addressing legal questions in this area. There are, however, some concerns that should go straight to a tax attorney, and these four are among the biggest.
Starting a Business
How you set up a business will determine how it is taxed. It also will determine your exposure to legal liability, and that can lead to a serious balancing act. Running a sole proprietorship, for example, might avoid some reporting requirements, but it also exposes your personal wealth to potential seizure in lawsuits or tax complaints. Conversely, a fully incorporated business may have to submit regular reports, especially if it has stockholders. A tax attorney can help you understand the pros and cons of setting as a stock company, an LLC, or something else.
Preparing for a Taxable Estate
Transferring an estate to heirs may make it subject to the estate tax. For FY 2019, the exemption was $11.4 million from an individual and $22.8 million for a married couple. These amounts are adjusted upward each year, and it's wise to keep tabs on them if you're worried that your estate might land on the wrong side of the cutoff.
If you're sure a portion of your estate will exceed the limits, it's a good idea to plan accordingly. Tax attorneys encourage their clients to create accounts that will fund the payment of these taxes upon their deaths.
Reporting taxes from overseas income is a tricky business, and many people are tempted to treat it as being out sight and out of mind. Generally, though, overseas taxes are already being taken out, and the U.S. federal government often allows Americans to deduct the difference. If you're paying taxes in a country like the Netherlands that has a very high rate, for example, you might end up with zero U.S. liabilities anyhow. Regardless, failing to report overseas income is a crime, and you don't want to take that chance.
There are plenty of preferential structures for preparing for retirement. It's prudent, though, to learn about the available tools, potential penalties for early withdrawals, and accompanying risks. For example, there are differences between when you can take money out of a traditional versus a Roth 401k account. It's best to choose an account based on how likely it is you might need to access that money.
For more information, contact a tax attorney service like Harris Shelton Hanover Walsh PLLC.Share