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.
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.
- 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
- Create two sets of forecasts: conservative (think smart) and ambitious (think big).
- 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.
Financial advisors deliver planning and organizational resources for their clients. The term financial advisor is unspecific. Advisors specialize in retirement planning, estate, college, business, tax planning, portfolio building or anything related to the generalized management of your finances like setting goals, picking investments, saving for an emergency fund or assessing risks.
Wealth managers are much more systematic and typically work with high – net worth clients. Most wealth managers have expertise in financial advisors, yet many financial advisors may not be able to assist you with managing your wealth. Both financial advisors and wealth managers, set their own minimum account requirements, so terms and conditions will likely vary based on your requirements.
I take a collaborative approach to both financial planning and wealth management. Whether it’s company taxes or individual retirement objectives, I will review your current financial position to help you strategize your future financial goals then help you build a savings and investing roadmap that itemizes your options for asset protection and building. I am qualified as both a wealth manager and financial advisor and am looking forward to helping you reach your financial ambitions expediently and comprehensively.
Schedule your free consultation at JeffreyLevine.Solutions today.
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.
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.
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.
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.
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.