Business Tax Lawyer in Orange, CA
Business owners in California can face significant penalties when they fail to consider tax matters as part of their planning and entity selection process. Taking the time to contemplate tax considerations at the start of forming a business is frequently a key component of why a business succeeds or fails. Selecting the wrong business entity or neglecting important tax considerations can lead to the buildup of unpaid tax obligations and penalties so substantial that the business is no longer viable.
In some instances, like failing to withhold and deposit payroll taxes properly, the business owner may be held personally accountable for the outstanding tax. Additionally, business owners must consider various tax matters when passing the company on to the next generation or a new executive group.
At Morgan Sebastian Law, we are committed to helping business owners prepare for and meet their local, state, and federal business tax requirements. We are happy to provide business tax planning services for a wide range of company needs, including business formation, routine tax planning, payroll and employment tax administration, and company succession planning. To schedule a confidential and free 30-minute consultation with an experienced tax professional at Morgan Sebastian Law, please call (877) 223-6605.
Legal Considerations for Entity Selection & Business Structure
When forming your business, selecting the right entity is an exhaustive process that is largely dependent on your particular business objectives, tax planning, and a variety of other factors.
New company owners in the U.S. may select from five business structures:
Limited liability company (LLC)
In California and all 50 states, there are few instances when business owners benefit from sole proprietorship. However, this type of business entity is the default when individuals fail to formally select an entity at the start of forming their business. Sole proprietorship is generally less favored because it doesn’t protect personal wealth from the threat of business liabilities. There are, however, a few circumstances when this business structure may be appropriate.
Tax Implications Are Dependant on the Type of Business Entity
Tax handling for your business can vary greatly depending on the entity you choose. If you form a partnership, S corporation, LLC, or remain a sole proprietorship—these entities are recognized as pass-through entities. Pass-through entities are not subject to tax at the entity level. Instead, the income of the company owners is taxed on their individual tax returns.
Conversely, a traditional C corporation is subject to potential double taxation at both the entity and the individual level. There are certain tax advantages associated with this entity, including an ability to defer taxation, providing that the corporation retains its income and capital gain is not realized. Ultimately, business owners must carefully evaluate the risks, benefits, and company goals when selecting the business entity type that’s most beneficial for their company needs.
Succession Planning for Closely Help Business & Family-Owned Companies
When the time comes for the founder, president, or CEO of a closely held business or family company to pass the torch, they may have particular views on how they would like the company to evolve after they’ve left. Planning for these occurrences can help safeguard a business from drifting off course from the founding principles or a hostile acquisition.
At Morgan Sebastian Law, we approach succession planning with four objectives:
Enhance and preserve liquidity
Minimize the financial strain generated by transfer taxes
Maintain structural stability within management
Fair and sufficient financial assistance for family members and other beneficiaries
Reliable Guidance for Payroll & Sales Tax for Commercial Employers
All company owners must manage and abide by a variety of business taxes at both the state and federal levels. Payroll and employment tax may incorporate California state payroll taxes administered by the Economic Development Department, while the IRS administers payroll taxes at the federal level.
Payroll taxes in California include:
Unemployment insurance (UI)
Employment training (ETT)
State disability insurance (SDI)
Personal income tax (PIT)
A variety of employers may have to pay employment taxes in California ranging from large corporations to small business owners with a single employee. If you have any questions or face possible infringements for payroll or California sales tax audit, speak with a knowledgeable business lax lawyer.
Turn to an Experience Business Tax Lawyer to Help with Your Commercial Tax Concerns
Lead attorney Becky Rose Sebastian at Morgan Sebastian Law, PC, is highly experienced in providing tax guidance for a range of business tax needs. She can advise companies across the U.S. on issues concerning legitimate tax minimization tactics without resorting to risky tax havens. Overseas tax havens must now report all accounts and identities to the U.S. government to stay in compliance with FATCA.
Additionally, Morgan Sebastian Law can offer reliable guidance concerning business entity formation, succession, planning, and employment taxes. To speak with Becky about your business taxes, call (877) 223-6605 to schedule a free consultation or complete our contact form.