Tax Planning | Law Office of Kevin Pritchett, Inc.

Just south of ‘Sawmill Creek…..
Hi Attorney Kevin Pritchett here
Business Structure Part I”Which Business Entity Structure Is Right For You?”
     As you can see from the chart above the answer to the “which entity structure’ should I use?” question is REALLY about…..

TAXES
     More specifically, saving taxes. Also

PERSONAL LIABILITY

Starting with this newsletter, I will explain each of the business structure types revealing the pros and cons of each focusing on taxes and personal liability.

    Today, I’ll begin with ‘Sole Proprietor’ structure. Don’t worry…you won’t have to be a CPA or Tax Geek like me to understand…I’ll keep it super simple and common sense…fair enough? Let’s dive in.

Sole Proprietorship (SP)
SP is the most basic way to conduct
business. You conduct business in your own name (even though you can and should register your sole proprietor business with a dba or ‘Doing Business As’ registration with the County Clerk where you conduct business.

Pros of SP:
==organizing business activity separately
==inexpensive and simple to start==no annual meetings
or other corporate formalities
==limited business tax write offs

Cons of SP:
==not able to claim totality of available business
deductions
==no personal asset protection…i.e. someone   can sue
your SP and ALL your personal assets   not just the SP
assets are at risk

Take Home Message For SP
A SP is how many people begin operating
business because of its simplicity and low cost.

     However, in my opinion (and in my over 30 years of legal practice) the cons of personal liability and limited tax deductions clearly outweigh the cons.

   Next time, I’ll go over the different types
of corporations and other entity options.

Reach Out To Me If You Have Questions.
If you have comments or questions about any of this…send me an email :ironkop@gmailcom or if reading on my blog or Facebook page leave your questions or comments below.

Remember…..
“Things Don’t Get Better With Neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
312-505-1957
ironkop@gmail.com
www.KevinPLaw.com

Hi Attorney Kevin Pritchett here

The IRS Has Set A Deadly Tax Trap For You
All money is taxed in one of 3 ways or ‘Buckets ‘for ease of illustration…..and one of those tax buckets is a DEADLY IRS Tax Trap theIRS has set for you. Read on…

1. Tax Now Bucket
This is where your money is taxed IMMEDIATELY!!

For example,
==your W-2 paycheck
==bank savings
==bank CDs
==emergency money saved in a bank

2. Tax Later Bucket
This is your qualified retirement accounts:
==IRA, 401k, 403B.

3. Tax Never Bucket
This is where your money accumulates without tax
and you can take it out ….WITHOUT TAX…a true tax free environment (once the money is put in this bucket.
It may be taxed prior to getting in this Tax Never Bucket).
    Examples of this Tax Never Bucket are:
==Roth IRAs
==Self Directed Roth IRAs
==Cash Value Life Insurance Policies
   The idea is to move as much money as possible away from the Tax Now and even Tax Later Bucket sand place that money in the Tax Never Bucket.

    Simple and Effective……Tax Season is here…get on it!!!

Remember……..
“Things don’t get better with neglect…..”

Kevin Pritchett, Esq
Law Office of Kevin Pritchett, Inc.
312-505-1957
ironkop@gmail.com
www.KevinPLaw.com

Posts

Business Structure Part 1: ‘What Business Entity Structure Should You Use?’

The Tax Trap The IRS Has Set For You