What Are the Advantages to a Holding Company for Tax Purposes?

What Are the Advantages to a Holding Company for Tax Purposes?

If you own shares in a company understand that if you collect any dividend payments from that company, you will be responsible for the tax consequences. However, if the holding company you own also owns your shares in the corporation, dividends paid to your entity will largely be tax-free.

United States tax law allows a holding company to receive a deduction for dividends received from its corporation and to defer a percentage of the taxable income.

What Is a Holding Company?
The traditional holding company has no operations, activities, or direct business; however, its specific purposes are to owns shares in another company. The assets can consist of shares of stocks that can be backed by anything that has value. If you are planning on investing in companies through stocks, securities, or bonds, you will encounter the term “holding company.” Many of the most successful companies in the world are holding companies.

Ways To Use A Holding Company
 Assets in a retirement fund can be utilized as a type of pension if required if they are in a holding company
 Company profits can be converted to the holding company as dividends
 Tax-free dividends can be distributed to the holding company as the beneficiary
 Holding company shares can be placed in a trust
 The holding company can be held by single or multiple people creating the leverage to divide dividend payments and taxes.

Subsidiary vs. Holding Company
A company can set up a subsidiary, and if the subsidiary doesn’t succeed, the parent company is not liable for the debt as the two companies are separate entities who pay their own taxes on their income. A subsidiary company can make its own choices and manage itself, without approval from the parent company which can still maintain its control by just being the sole shareholder.

To learn more about how you can benefit from revolving your tax plan around your holding company and subsidiary company, schedule your free consultation today at JeffreyLevine.Solutions today.

Calculating Your Retirement

Calculating Your Retirement

If you are around the age of 50, I am sure you are considering the best financial decisions that will benefit you and your loved ones while allowing you a comfortable retirement.

A retirement plan must be concise, relevant, and based on a growing financial model. To best assess your retirement goals the best thing you can acquire is a retirement calculator. You can find one on a general search engine. The retirement calculator will help you see exactly how much is enough to maintain your financial comfort. This tool will allow you to calculate expenses vs income and investments as well as assist with understanding what will be the best age to tap into social security benefits or pension when required, how long your 401 (k) or IRA contributions will last and the value with leveraging your investment income.


Setting realistic goals that reflect your true finances including short and long term expenses can significantly aide you into a smooth transition once you leave the workforce and journey into the world of a successfully planned retirement.


When calculating your retirement financial needs consider as a priority the longevity of your existing mortgages, estimate health expenses, including long term care, and make sure you are investing the maximum into your retirement accounts.
While making sure that your investments continue to grow and are sustainable, remember its always ok to take on a freelancing gig or a hobby like teaching something equitable to those who need your expertise. It is a great way to earn extra income and do some great things in your spare time.

 


I would love to assess and ascertain your retirement goals and am looking forward to helping you realize a relaxed transition with proper planning. Feel free to reach out to me, no matter what age you are as retirement is not an age thing, but an inevitable thing depending on goals and circumstances. I can be reached at JeffreyLevine.Solutions where you can schedule your free 20-minute consult.

Three Important Business Forecasting Tips

Three Important Business Forecasting Tips

Proper financial forecasts will help you develop operational and staffing plans, hone down the most effective business model and make your company look more attractive to investors.

Here are 3 primary points you should ponder when forecasting your business for ultimate growth that should be revisited monthly, quarterly, and yearly for maximum sufficiency in conjunction with your business plan.

  1. Itemize fixed and variable costs plus overhead expenses first. Start with expenses, not revenues while leaving ‘padding’ for the costs of labor, licensing fees, insurance, legal expenses, marketing and advertising
  2. Create two sets of forecasts: conservative (think smart) and ambitious (think big).
  3. Understand the ratios that reconcile revenue and expense projections:

Gross margin = Total Direct Costs compared to Total Revenues

Operating profit margin = Total Operating Costs compared to Total Revenue (-financial costs)

Total accounts in comparison to each employee

For more details on growth forecasting for your startup or existing business, I am facilitating consultations to discuss your specific needs.

Schedule your free consultation for you and your team at JeffreyLevine.Solutions today.

Key Questions to Ask When Tax Planning

Key Questions to Ask When Tax Planning

Ask yourself these key questions when tax planning to ensure that you receive the largest possible tax savings:

1. Does your tax team include a tax planner or advisor who is knowledgeable about current tax laws?

2. Is your strategic tax planner aware of your entire financial agenda?

3. Is your advisor knowledgeable in both personal and business tax laws and filings?

4. Have you reviewed your previous tax years returns line by line with the advisor to discover viable changes relevant to you?

5. Are your tax, financial, and legal team on the same page?

6, Are you getting your primary tax advice from a neighbor or family member?

7. Does your current tax plan encompass your estate goals, retirement objectives, philanthropic interests, existing investments, business revenues, and personal income?

8. Are you meeting with your advisors between April and September?

9. Is your investment income realizing the most tax-efficient benefits?

10. Does your retirement plan include IRAs, 401Ks, and substantial life insurance where applicable?

Keep in mind there is no order of importance related to these questions as they are all equally important to your overall financial success.

If I can be of service to help you design, plan, and implement your financial or tax plan do not hesitate to reach out to me at JeffreyLevine.Solutions today for your free 20-minute consultation.

Business Models and How Your Taxes May Differ

Business Models and How Your Taxes May Differ


If you are an entrepreneur or considering starting a small business, your 1st consideration will be which business entity is right for you to meet your primary objectives which is to make profits while saving in taxes. Let’s review a few facts to assess which business entity could be right for you and what your tax planner may recommend for tax savings, asset protection, and retirement benefits. Yes, it does matter which entity you choose because that business model directly determines how much money you can save in net taxation by between ten and 40 percent and how much you can invest in an equitable retirement.
Let’s look at the top business entity preferences and how they can possibly benefit your objectives.

Self-Employed
Those who receive income via 1099 are independent contractors or freelancers who must pay self-employment taxes in addition to regular income while representing themselves as both employee and employer. You do not have to have any type of corporate entity to be self-employed. Ask your planner based on your income tax bracket if you qualify for any pass-through deductions.


S Corp
A typical S Corp is a pass-through entity that has no legal responsibility to pay taxes on its corporate income while all profits flow through to the proprietors, therefore the owners pay income taxes on their personal returns.


C Corp (Most Large Corporate Entities)
Pretty much any company that has gone public, or plans to go public, will likely be a C corp. C corp, entities are taxed separately from the shareholders. If your company intends to go public then this may be the entity for you as there are no restrictions on ownership or limits to the number of shareholders you can procure. C Corps offer a lower tax rate but also leaves the potential for “double taxation” on the corporation’s profits and when shareholders distribute their dividends.

LLC
A Limited Liability Company (LLC) can be file as a partnership, S corporation, or even sole proprietor. An LLC is a pass-through entity that isn’t required to pay federal income taxes, so the owners will report profits and losses on their personal federal tax returns. Understand as well that many states charge an annual fee for the LLC designation. An LLC’s owner can elect to tax it as a pass-through entity a qualified business income deduction could apply. Discuss with your tax planner what would be the best way to set up the LLC to allow for the benefits the entity has to offer.

Your tax planner will know best based on your business objectives and profession what corporate entity would be in your best interest to initially incorporate to maximize your earnings and ensure a profitable retirement.

If you don’t have a tax professional at your leisure, I am definitely willing to speak to you regarding your objectives.

Reach out to me at JeffreyLevine.Solutions anytime to schedule a free consultation on tax planning, beneficial retirement opportunities, and lucrative business exit strategies.

The Importance of Having A Mastermind Mentor or Coach

The Importance of Having A Mastermind Mentor or Coach


Mastermind mentors and coaches are often necessary to encourage, support, guide and provide collaborative advice to help their mentee navigate smoothly their professional resources, networks, and leadership capabilities to realize the most results and ultimately profits from their business ventures.


High-quality mastermind mentors and coaches, although seemingly expensive bring a wealth of aid to an individual looking to best harness their responsibility levels to optimize successes in their primary objectives. A mastermind mentor considers your underlying motivations and via extensive evaluation processes aids the mentee to identify and correct deficiencies on both developmental and impersonal levels.


Relationships with mentors or coaches can provide some of the following underlying benefits to mentees:
A direct authority with inside expertise and experience that supports your industry’s vision
Confidence and character-building strategies that help you to be a better person
The ability to draw Higher salary opportunities via direct network building strategies
An educated ally who has your back no matter what

When evaluating a mentor or coach consider the following questions:
What are my short- and long-term mentoring needs?
How do I assess a mentor’s competencies and deficiencies?
How do I approach the mentor once I think they are a good fit?
How do I develop credibility in my respected field?
What are the takeaways to get the most from this mentoring relationship?

Mastermind mentors and coaches create support systems for their mentees often time eliminating guesswork, trial and error while providing honest feedback based on personal knowledge and industry trends. A mastermind mentor can provide insight into living a healthy lifestyle, dealing with difficult people, work/life balance, and of course growing your business.

If you would like to discuss your mentorship needs,  how to take your business to the next level of revenues, or are looking for a profitable exit strategy, reach out to me to schedule a consultation at JeffreyLevine.Solutions today.