tax planning basics
Business Succession And Estate Tax Planning Strategies
Many work hard and meet with success, as they batter through storms, handle market swings and keep consumers satisfied. You achieved all this for yourself and your family. But have you spent one minute and thought about what would happen to your business when you are not there? If you haven’t, then it is high time you gave it a serious thought. So here are some simple business succession and estate tax planning strategies.
According to a market survey, 25 percent of the family business shareholders who are senior citizens have not thought of any estate succession planning other than writing a will. They have not bothered to conduct any research. If you are one of them then wake up, succession planning for business involves more than just deciding whom you intend to give your assets to, after your death.
Basically, succession planning is like a road map for successors, heirs and partners to follow when you are no more or when you are unable to handle the business issues due to disability or old age. This plan can include the business stock distribution, assets and life insurance distribution details. It can also include debt retirement services, buying and selling agreements between heirs and partners, division of responsibility allotted to successors and any other aspects that would be related to the business. The plan can also establish the value of the business.
So where should you start from?
A succession planning strategy must clearly explain your objectives and goals as well as your company’s present financial resources and the current human resources. It should also explain your stand in the company and the details of the stock you hold. You can also mention the person whom you feel can manage the business once you are out of the picture. Calculate if you have enough assets to pay estate tax so as to balance the estate and keep the business and the monetary resources you need to reach your financial goal. Don’t forget to clarify each goal and you should be open to communicate and share your vision with partners, key players, and family.
How to develop a sound succession plan?
. A succession plan should be flexible- Your plan must be easy to amend and modify as business, family and health situations are dynamic.
. Select the right individual to handle the company in your absence- Select a person, whom you find capable to navigate through the minefield. This is necessary if you have more than one qualified successor. Distribution of money and assets among the siblings sometimes can be really discordant.
. Knowledge of federal estate tax- Economic Growth and Tax Relief Recognition Act of 2001 attempted to eliminate or reduce the federal estate tax transfer system, but instead it created a tax system that features repeal, relief and reappearance. From 2004, the gift tax exemption was freezed at $1 million. Thus, a businessman can easily pass on more assets after his death than during his lifetime.
Learn about various exemptions, deductions, exclusions- You can reduce the estate tax by adapting the annual gift tax exclusion in which you can relax the gift tax to the tune of $11,000 per year.
About the Author
Sacramento CPA Firm Murray and Young offer Tax Representation by a former IRS auditor. For useful articles and tips by Sacramento Estate Tax Planners, please visit our website at http://www.april15.com.
Am I getting ripped off?
The night before yesterday, I went with a new phone company, which is Cricket.
I bought a Samsung Messager for 139.99 (plus the tax).
I went with the $45.00 monthly plan which includes the basics, unlimited texting, unlimited calling and unlimited nationwide calling/texting,etc. and unlimited mobile web.
The bill is SUPPOSED to be $45.00 every month and this this month 1 but then suddenly, this afternoon, I got a random text from Cricket saying that my bill for next month is $91.00!! What the hell is all of this about? They said there is no hidden fees,etc.
I went in to the store and they just told me to come back later.
Help please? Does this sound like a mistake to you?
Also, if I accidentally bought something, does the phone alert you of how much you need to pay, or did pay?
I am so confused and upset!!
Yes, you have been ripped off. My cousin’s boyfriend had the same problem and he had a hell of a time fixing it. After a lot of fighting and mixed words that should never be spoken between mixed company, he went with Verizon Wireless.
Verizon has the best customer service, no hidden fees. You can have no contract, month-month, 1-year, or 2 year. They have a plethera of phones to choose from and they are HIGHLY recommend by me and my whole family for their Customer Service. They are very nice and very helpful.
I hope you can get out of your mess okay with no more wasted money. Good Luck!
Tax Basics – Tax calculation.mp4
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