Examples of Advanced Tax Planning

Frequently Asked Questions about Tax Planning

Q: Does a sole proprietor need to have a tax ID number?

A: A sole proprietor generally uses his or her Social Security Number as a tax ID number. However, it may be necessary for a sole proprietor to obtain an employer identification number (EIN).

Q: What is a tax-deductible business expense under federal income tax law?

A: Basically, any ordinary and necessary expense that is business related may be deductible. The expense must be customary and incurred in the usual course of business. However, certain expenses may be prohibited. To know whether a particular expense is deductible, check the Internal Revenue Code and seek the advice of a tax lawyer.

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Located in the Chicago-Naperville area, tax planning lawyer Denice Gierach would like for you to understand the benefits of proper tax planning as well as have the basic information you need to make informed decisions regarding business planning and estate planning. Therefore, we are providing you with the following information about tax planning.

Please keep in mind that this general information is not intended to be legal advice or to pertain to your particular situation. If you have questions about the information provided below, or if you would like to discuss your business or estate planning matter with an experienced trial lawyer, please contact the Gierach Law Firm. We are here to help you.

We hope you found the above information beneficial and enlightening. If we can assist you with personal or business tax planning matters, please schedule a confidential consultation with an experienced CPA and tax attorney by calling us at (630) 756-1160, e-mailing us, or filling out our intake form.

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Tax Planning - An Overview

Tax planning is a major concern for every business. Improper planning could result in several negative consequences, including an extremely high tax bill and an Internal Revenue Service (IRS) audit. In addition to the federal income tax, there are a number of other tax issues that a business must consider. There may be state tax, local tax, sales tax, payroll tax, employment tax, capital gains tax, estate tax and gift tax obligations for which the business must plan. A comprehensive tax plan can help ensure that your business complies with all the applicable tax regulations. A tax attorney can assist your business with creating a complete tax plan.

Tax Laws Affecting Businesses

A tax is a compulsory payment by an individual or business entity to a governmental body. Federal, state, city, county and other governmental entities impose taxes on both businesses and individuals. A business must plan for all of these potential tax obligations. An attorney who practices tax law can advise your business about applicable state and local taxes to which your business may be subject.

Federal Income Tax

Federal income tax is the largest contributor of revenue to the federal budget. Income tax law is complex, especially when applied to businesses. It is critical for businesses to have an understanding of these laws and how they will affect the business' tax liability and bottom line. A tax attorney can assist your business with understanding and complying with federal income tax laws.

Income Tax Deductions for Businesses

Careful planning can allow a business to lessen its tax liability by using qualified income tax deductions. The Internal Revenue Code can be a daunting piece of text. It is exceedingly long and detailed. In addition, most sections of the IRC have corresponding regulations that further help to interpret its provisions. However, a basic understanding of deductions is important as they may lessen your business' tax liability. A tax attorney can help your business minimize its tax obligation with federal income tax deductions.

Business Organization and Taxation

When deciding which type of entity is right for your business, it is important to consider the tax implications. Each entity is subject to different taxation requirements. The most common types of domestic business entities are sole proprietorships, partnerships, corporations and limited liability companies. A tax attorney can help you weigh the tax advantages and disadvantages of the different business forms.

Tax Planning Resource Links

Internal Revenue Service (IRS)
The IRS is the division of the US Treasury Department that is responsible for the assessment and collection of most federal taxes.

US Small Business Administration (SBA)
The federal agency that aims to assist small businesses with advice, financing and business development aid.

Title 26 of the Internal Revenue Code (IRC)
The IRC is the federal tax code. It includes sections for income tax, estate and gift tax and employment taxes among others.

Title 26 of the Code of Federal Regulations
Title 26 contains regulations released by the IRS to help interpret the Internal Revenue Code.

IRS - Tax Information for Businesses
This section of the IRS Web site provides specialized information for businesses.