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Business entities and tax obligations

Tax Day is behind us, but the recent tax scramble serves as an opportunity to discuss the tax obligations of businesses. The type of business structure chosen directly impacts tax obligations. Entrepreneurs that are considering choosing a business structure are wise to review the tax applications of each option before moving forward.

How much of an impact can business entity choice have on tax obligations? A recent report finds that this can result in a difference of 10 to 40%.

First image of black hole sparks IP controversy

Controlling intellectual property online is a difficult task. Software, written works and even images can proliferate and the rightful owner may have a difficult time enforcing protections. The disputes that can arise were recently highlighted when a scientific group released the first ever photo of a black hole.

The image was a serious scientific triumph. Never before has an image like this existed. As a result, it does not come as a surprise that ownership rights would be a valuable commodity.

Business succession plans: Account for digital assets

Entrepreneurs are often rightfully proud of their businesses. They may have wishes for the business to stay in the family or have another individual they are grooming to take over the reins when they retire. Whatever the plan for the next phase of business ownership, it is important to have a business succession plan in place to help better ensure the transition goes smoothly.

What happens if there is not a succession plan? Businesses without a succession plan become part of the owner’s estate. If the estate plan does not account for the business, the business may go through probate. Probate is a long and often expensive, public court process. The transition of business ownership is difficult enough, but the probate process could be enough to kill the business.

How to pierce the corporate veil: opioid case provides an example

One of the key benefits to most types of business formation is protection from personal liability. Business owners may choose an LLC, LP or corporation for various reasons, but all three generally protect the owners from any debts or lawsuits the business itself may face.

Personal protection is true in most cases...but not always. The protections offered by a business entity are limited. The current opioid crisis provides an example. Opioids are used in certain pain medications, like OxyContin. Although an effective tool to manage pain, the medication has been found to be highly addictive and has resulted in the deaths of an estimated 218,000 in the United States from 1999 to 2017. 

The evolution of the practice of law: Boutique law firms

The legal marketplace is changing. Attorneys are doing more than just practicing law, they are becoming entrepreneurs and starting their own practices in their preferred area of law. Recent data shows 23 percent of legal practitioners were interested in opening their own practices in 2016 -- a huge jump from the previous poll in 2005 showing only 5 percent were considering this business move.

Thinking of joining this growing wave of professionals? The following tips can help better ensure a successful start:

Self-employed? You may owe the IRS quarterly tax payments.

There are many perks to owning your own business. You set the budget, expectations and goals -- but you also must assure that all laws are followed and tax obligations are fullfilled. For some, this is another perk. The ability to control these details may bring a sense of joy akin to completing a difficult puzzle. For others, the details may seem more of a required burden. Regardless of which description you can relate to, business owners must ensure the work is done.

The first step towards mastering any task is knowing the basics. One particularly difficult aspect of business ownership involves navigating tax obligations. For a pass through entity such as a partnership (including an LLC taxed as a partnership) or a subchapter S corporation, the IRS generally requires estimated tax payments throughout the year. Some business owners have two options to meet this obligation. Either the IRS can receive payment through regular withholdings or through quarterly estimated taxes.

Business owners and tax audits: What to expect

The Internal Revenue Service (IRS) reviewed tens of thousands of small business tax returns in 2017.

How will I know my business is the subject of an audit? The IRS always notifies the business through a mailing. Never by phone. 70.8 percent of all audits were conducted entirely by mail in 2017. After the original notice, the agency may send an agent to conduct a field audit, but this is relatively uncommon. Only 29.2 percent of all audits were conducted through use of a field agent in 2017.

Is it still worthwhile to invest in retail real estate?

The rise in online retail has undeniably shifted consumer behavior. While the change has led to high-profile declines for big-box retailers such as Sears and Toys-R-Us, does it make this the wrong time to invest in retail real estate?

Like most real estate investments, the answer depends on the circumstances. There are plenty of good investments to be made within the retail industry if you know where to look. National Real Estate Investor recently spoke with industry insiders and came away with key takeaways for retail real estate investing.

Tips for successful business leadership

Successful entrepreneurs may have difficulty translating their business style into an effective leadership strategy. A few tips that can help business leaders provide quality leadership for their personnel include:

  • Take time. This is a two-part tip. First, take the time to meet with your staff. Provide a platform for workers to voice concerns and suggestions for improvement. Second, be present during these meetings. Put down the smartphone and turn away from the computer. Make eye contact, avoid interruptions and actively listen to what your employee has to say.

Private practices: Tips before agreeing to medical practice buyout

The Avalere Health and the Physicians Advocacy Institute (PAI) reports acquisitions by hospitals of physician practices increased 128 percent from 2012 to 2018. The group estimates hospitals acquired over 13,000 physician practices from 2015 to 2018. PAI estimates over hospitals own over 80,000 physician practices throughout the country.

It appears this trend will continue. PAI predicts the rate of healthcare mergers involving hospitals acquiring private practice physician groups will continue to grow through the year.

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