Month: January 2019

By Michael Cruz

Good business planning must start with Visualization.

Unless you want to finish next year exactly where you are today, it is important to think about where you want to be. And then write it down. Visualization starts with a thought process. What do you see your company headed? Sales goals? Customer satisfaction goals. Do you want to add new products or services?

Planning adds urgency to those goals. I worked with a client years ago that needed more space to reach their growth goals. We worked to define what that facility would look like. He described the building he wanted to move into. And, a year and a half later he moved into a facility that exactly matched the picture he had in his head.

It highlights the magic that came from his created visual. And he has exceeded his growth goals that came with the new facility.

Carissa A. Conley, CPA

With the newly lowered corporate tax rate, many passthrough businesses are wondering if they should now convert to a C Corporation. The Tax Cuts and Jobs Act (TCJA) reduced the corporate tax rate from a maximum of 35 percent to a flat rate of 21 percent and eliminated the corporate AMT.

Meanwhile, income of passthrough entities is taxed at the individual taxpayer level which is still based on graduated rates up to a maximum of 37 percent. While this initially sounds like a no-brainer, in most cases, small businesses will be still pay less tax as a passthrough entity.

Even though a C Corporation is only taxed on its net income at a rate of 21 percent now, there is still the issue of double taxation when shareholders take dividend distributions. Depending on the shareholder’s tax bracket, these dividends which have already been taxed at 21 percent, are now taxed again at a rate up to 20 percent (for those in the highest tax bracket) plus another 3.8 percent for Net Investment Income tax.