Category Archives: Corporate Tax / Business Planning

By Susan E. Campbell
As a new year arrives, many company owners review their business plans to make sure every financial decision, marketing program and staff member remain aligned with their company vision.
“Most of the time a business plan is stuck in a drawer and only revisited when the owner needs something, such as a loan,” said William Brigham, director of the Small Business Development Center of the University of Albany School of Business.
“We see a thousand businesses a year from 11 counties, and people would be surprised by the lack of a formal business plan,” said Brigham, who has been with the nonprofit organization for 20 years.
Financial advisors agree that a solid business plan is at the heart of a company’s success. Some aspects of the planning process are commonly overlooked or under-emphasized, according to local professionals who shared some tips for keeping companies on point, especially this time of year.

By Meghan Murray
Now that we’ve closed the book on 2019, it’s officially tax season. As you prepare your tax returns for the April 15 deadline, you might already start looking for opportunities to improve your tax-related financial outcomes in the future.
One important step you can take is to connect your tax professional with your financial advisor.
Together, these professionals can help you take advantage of some valuable strategies:
• Roth vs. traditional IRA. If you’re eligible to contribute to a Roth IRA and a traditional IRA, you might find it beneficial to have your financial advisor talk to your tax professional about which is the better choice.
Generally, if you think your tax rate will be higher in retirement, you might want to contribute to the Roth IRA, which provides tax-free withdrawals (if you’re older than 59½ and have had your account at least five years).

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.