Q: Should I incorporate my business? 
A: It depends on your situation often depending on the size of your business.  Advantages can be a reduction of your income taxes and creating limited liability for some potential law suits.  S-Corporations are often used to reduce taxes. We can help you determine what is best for you. If incorporating will help you, we can guide you through that process. A disadvantage of incorporating is the additional administrative work of keeping better business records and filing payroll tax returns. We can, of course, help you with these as well.

Q: We’re a non-profit, we don’t have to pay taxes do we?
A: It depends on the amount of gross (not net) receipts you have and where those receipts came from.  In general, if your gross receipts are over $25,000, it’s time for you to start filing tax returns. If you discover you should have filed in prior years and have not, we are experienced in helping clients file their returns and getting the substantial (10%) penalties abated.

Q: Our association has grown and it seems we just need better records, what should we do? 
A: We often find providing our clients with regular weekly accounting services is just what they need so that their staff can focus on the needs of their members.  Our experienced staff has the answers to resolve accounting questions, provides timely reports, and provides assistance with budget preparation.  We also provide auditing services to our clients who have that need.

Q: I heard from a friend at a cocktail party that if I put all my money in a trust, I won’t have to pay any taxes, is this true?
A: No this is not true, if fact trusts pay a higher rate of income tax than individuals.  There are, however, people out there asking for money and making such claims. Stay away from them, the IRS scrutinizes these schemes closely and they are considered fraudulent.  Trusts can be used quite lawfully, however, to reduce your potential estate taxes.  These trusts are typically created as part of your estate plan and you may want to discuss using them with an estate planning attorney.

Q: What can I do to reduce my estate taxes? 
A: There are several things, but a coherent answer applicable to a person’s particular situation is beyond the scope of this type of format. You should really consult with an estate planning attorney, such in ours.  In general, the use of trusts and a program of gifting are typical recommendations.

Q: How do I avoid probate?
A: In general, putting your assets in a trust or owning your property jointly will avoid probate taxes. You should, however, consult with an estate planning attorney to develop an overall estate plan that is best for you.  Probate taxes are typically a small part of an estate’s expenses and other considerations should be part of your estate plan.

Q: What’s a living trust?
A: This is a trust created during your lifetime. Typically you put your assets into this type of trust. The advantages of it are twofold.  First, the assets in it are not subject to probate taxes. Second, if you become incapacitated but are still alive, someone you have named ahead of time can step in as your trustee and take over your financial affairs without having to have a court appointed guardian.  A disadvantage of this type of trust is having to actually transfer title to your property in to the trust.

Q: What’s a power of attorney for? 
A: If you become incapacitated, the person you have named ahead of time can step in and handle your financial affairs. This would apply to assets not owned by your living trust, if you have one.

Q: What’s a living will?
A: In general, a living will is a document that states you do not want extraordinary means used to keep you alive under certain conditions.  Your doctors will refer to your living will only if you are unable to communicate your wishes to your doctors yourself.

Q: What’s a health care power of attorney? 
A: If you are unable to communicate your wishes to your doctors, the person you have named ahead of time can deal with your doctors in your place.  For example, that person can show your doctors your living will. They can also tell your doctors whether or not you should receive a particular treatment or undergo a particular operation.