Cultivating Strong Leadership

For a business to go from one generation to the next, it must nurture the next generation of leaders to take over the position of its current leaders. The new leaders must be as strong and knowledgeable as the current leaders, or the business could fail. Implementing mentorship initiatives and leadership development programs and preserving knowledge about the business all lead to a smooth transition.

Adaptability and Innovation

New technological advancements constantly affect the business landscape. A successful business must adapt to advancements and consumer preferences, or it could fail. Ensuring that future generations also embrace adaptability and innovation provides a better chance of future generations remaining successful.

Fostering a Strong Culture for Your Company

Your culture is the center of your business and a good part of its success. Your customers are loyal to you, in part because of your culture – you have the same beliefs they have. When you hire employees with the same values, they further that culture and share the same values as your customers, creating a bond between the employees, business, and customers.

Prioritizing this same culture through those who will eventually take over the business increases the chances of the company remaining successful through the generations.

Diversification

As years go by, new markets appear. New generations can diversify into new markets, whether new products and services or new geographic areas, mitigating the risk of failure in future generations. Adding new products and services ensures you remain relevant through the years, as you are spreading risk over multiple geographic regions and sectors.

Customer Relationships

Without customers, you don’t have a business. Just as you nurture future generations of leaders, customers nurture future buyers. You keep customers by listening to your customers’ feedback, building trust, and investing in personalized service. You can anticipate your customers’ needs.

A child sees his or her parents patronizing your business and will often continue patronizing that business when they become older—as long as the business continues to provide the excellent service the parents enjoyed.

Planning for Succession

Above anything else, you must plan for succession to preserve it for future generations. Some businesses plan for multiple generations, which can be done through trusts as long as the company stays in the family. A Florida estate planning attorney can help you create an estate plan to preserve your business for future generations.

Additional documents required to protect your business for future generations include financial and medical powers of attorney. Florida has several types of trusts that can protect your business.

For example, should you become incapacitated, can the right trust seamlessly transfer control of the business to your adult children or another trusted family member or friend to manage until you are no longer hindered? A trust can also protect your business against certain creditors, such as hospitals and nursing homes.

Create a Comprehensive Estate Plan to Protect Your Business

Anything can happen at any time. Protecting your business from excessive taxes, creditors, and lawsuits significantly minimizes the risk of failure and allows future generations to enjoy the same benefits of business ownership you have. Mrs. France handles estate planning, probate, federal income tax planning, and business formation.

With experience in all three areas, France Law can draft a comprehensive estate plan to help protect your business from creditors and excessive taxes and ensure a smooth transfer to the next generation.

Contact France Law today for an estate planning consultation for your business.

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Taxes for 2023 and 2024

You may not think the upcoming changes for 2024 are important right now since you will be filing for 2023. However, those changes may affect your long-term tax plans, whether for your estate or your business. France Law Firm has an estate planning attorney who is also a business tax attorney who can help ensure your estate plan, business plan, and tax plan all work together to benefit you now.

Taxes for 2024 apply to the tax returns you file in 2025, while taxes for 2023 apply to the tax returns you file in 2024 (current year).

Per-Barrel Oil Tax

The Inflation Reduction Act reinstated the Hazardous Substance Superfund, which adds yet another tax to each barrel of oil. This tax affects anyone who itemizes and claims fuel for their businesses, as the oil companies are going to pass that tax onto businesses and individuals. While the tax is new in 2023, it is retroactive to Dec. 31, 2016.

Standard Deduction

The standard deduction is changing for 2024. In 2023, it is $27,700 for a couple married filing jointly. For 2024 (taxes filed in 2025), you will have an increase of $1,500 for a standard deduction of $29,200. Rates for other filing statuses are:

• Single People and Those Married Filing Separately: $13,850 for 2023 and $14,600 for 2024
• Heads of Households: $20,800 for 2023 and $21,900 for 2024

Marginal Rates

The tax brackets are remaining the same as the 2023 tax brackets. For 2023 and 2024, the top rate is 37 percent for individuals making over $609,350 and for married couples filing jointly making over $731,200. The additional brackets are as follows:

• 35 percent for individuals making over $243,725 and married couples filing jointly making $487,450
• 32 percent for individuals making over $191,950 and married couples filing jointly making over 383,900
• 24 percent for individuals making over $100,525 and married couples filing jointly making over $201,050
• 22 percent for individuals making over $47,150 and married couples filing jointly making over 94,300
• 12 percent for individuals making over $11,600 and married couples filing joint making over $23,200
• 10 percent for individuals making $11,600 or less or married couples filing jointly making $23,200 or less

Alternative Minimum Tax

The Alternative Minimum Tax (AMT) limits deductions. If an individual or married couple itemizing has too many deductions, the AMT kicks in, so you can’t lower your tax responsibility too much. In 2023, the AMT exemption is $81,300 and starts to phase out at $578,150 for individuals and 126,500, phasing out at $1,156,300 for couples filing jointly.

For 2024, the AMT kicks in at $85,700 for individuals and starts to phase out at $1,156,300.

Earned Income Tax Credit

Qualifying taxpayers who have at least three qualifying children can receive an Earned Income Tax Credit (EITC) of $7,830 in 2024 and $7,430 in 2023.

Estate and Gift Taxes

The basic exclusion for estate taxes (commonly known as the Federal Death Tax) for those who died in 2023 is $12,920,00, and in 2024, $13,610,000.

The annual gift tax exclusion is $17,000 for 2023 and $18,000 for 2024.

Contact France Law Firm

These are just a few of the taxes that will affect the average person or couple filing jointly. Several other changes include the limitation for the qualified transportation fringe benefit, employee salary deductions for contributions to health flexible spending accounts, self-only coverage in Medicare Savings Accounts, foreign earned income, and the maximum credit allowed for adoptions.

When it’s time to start your taxes for 2023 and if you need to make changes to your estate plan based on tax changes for this year and next year, contact a tax attorney and estate planning attorney at France Law Firm for a consultation.

The post Understanding the New Tax Laws: What You Need to Know for the Upcoming Year appeared first on France Law Firm.

The saying “The only things certain in life are death and taxes” holds true, but individuals can exercise control over their financial destinies by adopting smart financial decisions for optimal tax outcomes. Year-round tax planning offers a proactive approach, allowing individuals to make informed choices that can lead to significant savings during tax season. Seeking guidance from a business attorney with expertise in estate planning is invaluable in navigating factors such as retirement accounts and staying abreast of tax law changes.

Components of Year-Round Tax Planning

To effectively engage in year-round tax planning, continuous analysis of one’s financial situation is imperative. Regular scrutiny enables informed decision-making to minimize tax liability, presenting numerous opportunities throughout the year to achieve this goal. Key components include:

Review Your Financial Situation

Regularly assess investments, income, and expenses. Major life events, such as marriage, childbirth, career changes, and the loss of a loved one, should be carefully considered as they impact tax situations.

Check Withholding and Deductions

Ensure that withholding allowances are appropriately set to prevent overpayment or underpayment. This practice ensures that the IRS doesn’t hold onto your money without interest.

Investing

Understand the tax consequences of investments, particularly distinguishing between short-term and long-term capital gains, with the former usually subject to higher tax rates.

Tax-Advantaged Accounts

Contribute to tax-advantaged accounts like 401(k)s, Health Savings Accounts, and IRAs. Such contributions not only reduce taxable income for the year but also provide long-term financial benefits.

Stay Informed of Tax Law Changes

Tax laws are subject to constant change, impacting tax liability. Collaborating with Florida tax attorneys can help stay informed and make well-informed financial decisions.

Charitable Giving

Seek opportunities for tax-deductible donations to qualified charities and maintain detailed records of charitable contributions.

Retirement Planning

Leverage strategic financial planning for retirement, taking advantage of tax breaks and employing tax-efficient withdrawal strategies from retirement accounts.

Estate Planning

Utilize estate planning to minimize tax burdens, protect assets during incapacitation, and secure financial interests for future generations.

How Estate Planning Eases Current Tax Burden

Contrary to common misconceptions, estate planning is not exclusive to the wealthy. Anyone with assets, including a car and a bank account, benefits from an estate plan. Estate planning serves various purposes, such as:

• Protecting assets during unexpected incapacitation.
• Addressing capital gains, estate taxes, and probate costs.
• Tackling current taxes through gifting, charitable giving, and trusts.
• Reducing the taxable value of the estate.
• Safeguarding assets for future generations.
• Preventing excessive IRS deductions.

Implementing year-round tax planning and crafting an estate plan empowers individuals to minimize tax burdens through strategic donations and wise investment decisions. It facilitates informed decision-making during significant life changes like marriage, parenthood, relocation, or home building.

Consult the Tax Attorneys at France Law Firm

For personalized tax planning and guidance on creating a year-round tax plan, individuals can turn to the tax attorneys at France Law Firm. Schedule a tax planning consultation to embark on the journey of comprehensive year-round tax planning that aligns with your financial goals and minimizes tax liabilities.

The post Year-Round Tax Planning: Making Smart Financial Decisions for Optimal Tax Outcomes appeared first on France Law Firm.

Why Estate Tax Planning in Florida is Important

Many people retire to Florida because of its weather and lack of state income tax. However, the federal government seeks its share after you pass. An estate planning attorney can help you set up a trust to minimize that tax burden.

Another very important reason for using an estate lawyer to help you set up a plan is that anything can happen at any time. A trust can help with asset protection should you become incapacitated. It can also allow a loved one to handle your affairs until you are well enough to do it yourself.

You do not have to be a certain age to create an estate plan. In fact, if you are over 18 and own assets, regardless of the value, you should create an estate plan.

Types of Trusts for Minimizing the Estate Tax Burden

Florida has several types of trusts that can help minimize your tax burden, including:

Revocable Living Trust

One of the most common trusts in Florida is a revocable living trust. This flexible estate planning tool allows you to keep control over your assets during your lifetime and specifies how your assets should be distributed upon your death. A revocable living trust can help avoid probate and minimize estate taxes.

Irrevocable Life Insurance Trust

When you need a trust to hold life insurance policies, you can use an irrevocable life insurance trust. When you place your life insurance policies in this trust, the proceeds from the policy can be excluded from the taxable estate. This trust is needed (but not required) if your estate is valued at over $12.92 million.

Qualified Personal Residence Trust

You can transfer your primary residence to a qualified personal residence trust and still keep your right to live in it for a certain number of years as dictated by the trust. In the trust, list the number of years you expect to live – you have a right to stay in the house until then. This is one of the ways you can minimize your tax burden. If you are still alive when the time ends, you can pay rent to the estate, which further reduces your estate tax burden.

Charitable Remainder Trust

When you wish to give to a charitable organization, you can choose a charitable remainder trust. Any assets placed in this trust provide income to beneficiaries for a set time. If there is anything left in the trust, the remaining assets go to the charity you choose.

Dynasty Trust

Use a dynasty trust to provide for multiple generations. You can preserve wealth for the long term, plus reduce estate taxes for each generation so that your grandchildren and great-grandchildren can enjoy your wealth. The asset protection attorneys at France Law Firm can help you set up a dynasty trust.

Contact France Law Firm

While Florida offers many benefits because of its tax laws, the federal government is still going to use the long arm of the Internal Revenue Service to collect what it can get. You can use one or more trusts to minimize the tax burden for your heirs. Contact the probate attorneys at France Law Firm for a consultation to discuss a new estate plan or to update a current estate plan.

The post Estate Tax Planning: Utilizing Trusts to Minimize Tax Burden on Your Heirs appeared first on France Law Firm.

Tax Day History

The first time the government tried to collect taxes was to fund the Civil War in 1962. However, the tax was deemed unconstitutional because it was not implemented with uniformity across the states. In 1913, the United States enacted the 16th Amendment, making taxes due from everyone. In 1913, tax day was March 1. The government moved tax day to March 15 in 1918, and finally, to April 15 in 1955.

The 16th Amendment is simply stated: “The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several states, and without regard to any census or enumeration.”  The tax code is Section 26 of the U.S. Code.

Filing Taxes

Some states also require you to pay state income tax. As of 2017, Florida does not have a state income tax – you need only worry about federal income tax. If you have filed an extension for your taxes, October 6, 2017 is the deadline for the 2016 tax year. You must still pay any amounts due, even though you filed an extension.

Amended Tax Returns

While you may file an amended tax return at any time, you usually have just three years to claim any tax refund that you might be entitled to as a result of the amendment. That date is April 20, 2020. If you missed filing for one or more specific years, you may also file those returns at any time; however, you cannot use the government’s e-file system. Those returns must be filed by mail.

Filing Late

While a refund might disappear if you file after three years, past due taxes do not disappear. Additionally, the IRS might charge a fine for making a late payment, plus a fine for filing late. You’ll also be charged interest. Charges and interest are based on the amount you owe. You’ll also have to mail any late returns in. The e-file option is only available for the 2016 tax year, and only until October 16, 2017.

The penalties for filing late are more severe than the fees for not paying the amount due, so you should file on time, even if you can’t pay what you owe.

Getting Professional Help With Taxes

In most cases, if you are able to file a 1040 EZ, you may file your own taxes. However, if you have to file a regular 1040, you may wish to retain an accountant or a tax preparer to ensure that your taxes are done correctly. If you own a business, large or small, have rental income, or other special income, you may also want to have an accountant or tax preparer complete your taxes for you.

Every so often, the IRS audits tax returns. You might be lucky enough to never get audited, or you might audited several years in a row. If the IRS finds a mistake, it will notify you. If you believe that there was no mistake on your tax returns or the IRS says you owe more money, you may want to retain a tax attorney to help you sort things out. A tax attorney may be able to negotiate lower payments or even a lesser amount, depending on your circumstances.

If you are ready to file your taxes, but are not sure where to start because of any circumstances including multiple properties, bankruptcy and one or more businesses, a tax attorney and tax preparer working together are able to advise you on filing the proper documents.

Contact France Law Firm

Never assume the tax law is the same. Something changes every year. In going with current events, you also have to provide health insurance information for the 2016 tax year, but may not have to provide that information in the future. A tax attorney will help you keep up with the ever-changing tax code. If you have a tax issue, have been audited or have complex tax returns, whether personal or business, contact France Law Firm for tax advice.

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Taxable Income Reductions

Financial advisors and tax attorneys almost always push clients to create and contribute to retirement funds. That’s because this can be one of the gems to reducing your taxable income. IRA payments are considered a “pre-tax” contribution. That means that for every dollar you put into these retirement accounts, that’s a dollar you are not required to pay taxes on this year. Keep in mind, IRAs are really a tax-deferment plan and the government will be looking for that money in your twilight years. Like Ben Franklin said, taxes are certain. At least you’re softening the blow now and building financial security for the future.

The Sustainability of Spending Money

The green energy movement has opened up numerous doors for people to save money on taxes. Replacing antiquated heating systems, drafty windows and installing solar energy panels leads to significant tax rebates. These upgrades also improve your quality of life and increase property values. Taking these positive steps also gives you a wonderful feeling about doing your part for the environment. By spending money on energy efficiency, you’ll enjoy a better tax situation.

Plan Ahead

The thought of making charitable donations often hits you right in the middle of the gift-giving holidays. In many cases, that means having to stretch budgets and resources to effectively do both. After the season passes, many people look back wishing they could have given more. By practicing monthly or quarterly financial planning, you can allot resources in advance and feel good about the happiness spread through gifts and donations. Many of those charitable contributions are also excellent tax deductions. They’re the gift that keeps on giving.

It’s important to treat your personal finances like a business. And like any company, there are strategic investments to consider. You can diversify your portfolio by putting money into things like municipal bonds that are issued to fund projects such as airports and schools. These investments are considered tax exempt from federal and, usually, state taxes. Tax planning means making key decisions about your financial health in a timely fashion, not after the fact.

Brush up on previous years’ tax filings and use those records as an indicator for future decisions. Don’t hesitate to meet with your financial advisor or tax attorney. Get a clear understanding of the deductions you are taking full advantage of and those that could see improvement. Discuss potential tax credits and changes to the tax code. Long-term planning will undoubtedly make the process much easier from year to year.

Check the Box for Stress Deductions

One of the worst and most common things people do in terms of tax preparation is procrastinate. That personal policy actually doubles your stress. Not dealing with tax information leaves that little voice in the back of your mind that something remains unfinished. When crunch time arrives, you’re faced with a Herculean organizational task. Investing small amounts of time year-round will make things run much more smoothly and quiet that inner voice.

• Have A System: Create a system that works for you and streamline it from year to year. After all, taxes are forever. This doesn’t mean using and old shoe box full of crumpled receipts. There are plenty of inexpensive tax software products on the market. Even an Excel spreadsheet can provide basic expense tracking. Being organized is half the battle.
• Keep Receipts: You won’t save any extra money by having all of your receipts. On the other hand, if you get randomly audited, the IRS may reject certain expenditures and deductions without them. The IRS could also start a costly tax audit as well. A notebook and glue stick are sufficient to keep proof of payments organized. Many small business owners glue them to a page and make an entry about what that money went toward. In the event of a computer crash, this gives you a hard copy backup.

Benjamin Franklin and Founding Fathers fought the American Revolution to ensure fair and equitable taxation. You are assured a voice in how the government taxes your income and assets. Utilizing good organizational practices and financial planning can make your ledger sheet a little more equitable and easier to manage.

It’s important to work with an experienced attorney on tax-related matters. At the France Law Firm, we are here to help.

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Only 0.2% of Estates Pay the Federal Estate Tax

According to the Joint Committee on Taxation, 99.8 percent of all American estates pay no estate tax. This means that only 0.2 percent of all Americans are required to pay these taxes. The reason for this is due to the exemption amount of the tax. In 2001, the federal estate tax’s exemption amount was $650,000 requiring more Americans to pay it but that number has steadily risen, reaching $5.45 million in 2016. The result of this increase means that only two in every 1,000 American estates will be required to pay these taxes.

Estates Usually Pay Less Than One-Sixth of Their Value in Federal Estate Taxes

The Urban-Brookings Tax Policy Center (TPC) has reported that in 2013, estates that were required to pay the federal estate tax only paid 16.6 percent of their estate’s value on average. The reason for this is that the taxes are only levied on the portion of the estate that exceeds the exemption level. This means that an estate that is worth $5.5 million would only have to pay $50,000 in estate taxes as that’s the amount that is remaining that exceeds the exemption level. Also contributing in this low percentage is that many estates are able to protect their portions of their estate from being taxed through deductions enacted by policymakers.

Avoiding Federal Estate Tax Through Loopholes

When an estate reaches that exemption level of $5.45 million, owners of the estate will look for ways to lessen the burden of the federal estate tax. There are multiple loopholes that can allow these estates to avoid paying the entirety of the tax. One of the more significant loopholes is through grantor retained annuity trusts (GRATs). Through this trust, the owner of the estate will put money into a trust that has been designed to repay the estate’s initial amount in addition to an interest rate that has been decided on by the Treasury. This is typically done over a period of two years. If the value of the investment rises more than the rate set by the Treasury, the amount gained will automatically go to the heir of the estate tax free. If there is no rise in value of the investment, the entirety of the amount still returns to the estate. The estate lawyer that found this loophole has estimated that it was saved wealthy estates as much as $100 billion in estate taxes since 2000.

Small Farms and Small Businesses Paying Estate Tax

Very few small farms and small businesses actually pay estate taxes. In fact, according to TPC, only about 20 of these estates in the United States have to pay any estate tax as of 2013. Those 20 businesses and farms owed only 4.9 percent of the value of their estate in federal estate tax on average. A study in 2005 by the Congressional Budget Office (CBO) found that the overwhelming amount of small farms and small businesses that owed these taxes have sufficient liquid assets that the farm or business would be left alone.

Federal Estate Tax Provides Significant Revenue Source

While very few estates have to pay the federal estate tax, the amount of revenue that the tax brings in for the federal government is quite significant. The Congressional Budget Office estimates that the tax will generate about $275 billion between 2017 and 2026. While that is less than one percent of the federal revenue gained during that period, it is more than the federal government will spend on the Food and Drug Administration (FDA), the Centers for Disease Control and Prevention (CDC), and the Environmental Protection Agency (EPA) combined.

Very few estates have to pay the federal estate tax with only 0.2 percent of estates in the United States being required to. Despite the number of estates that are required to pay the tax, it provides a significant revenue source for the federal government. If you need more information on your taxes, come see the experts at France Law Firm.

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