Tax Implications of the CARES Act at a Glance

As Michelman & Robinson has reported, the Internal Revenue Service has extended federal tax filing and payment deadlines to July 15, 2020 in response to the coronavirus crisis. Of note, there is no limitation on the amount of tax payments that can be deferred to July, which is a change from early accounts of a $1M limit. Also, federal gift tax and generation skipping transfer tax payments have been similarly (and automatically) postponed to July 15. (Read More)

Michelman & Robinson Breaks Down the Families First Coronavirus Response Act

The House passed sweeping legislation Saturday to respond to the coronavirus outbreak, an overwhelmingly bipartisan vote to expand access to free testing, provide $1 billion in food aid, and extend sick leave benefits to vulnerable Americans. Here, in question and answer form, Michelman & Robinson, LLP addresses some of the employment and tax implications of the bill that may be of particular interest to you.

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5 Key Considerations When Starting Your Cannabusiness

The estimate is staggering: $30,000,000,000. That’s a lot of zeros and a forecast of annual legal cannabis sales by 2025—this as more and more states legalize marijuana for medical or recreational use. No question, the cannabis business is booming, which is something of a given. Less obvious is what you, as a budding cannabusiness entrepreneur, should consider in making cannabis your business. Toward that end, there’s a broad range of issues to think about. (Read More)

The Tax Cuts and Jobs Act: Do Insurance and Real Estate Brokers Benefit?

Due to the double taxation of C-Corporations and their shareholders, most small business usually prefer flow-through entities such as S-Corporations, LLC’s and Partnerships for the operation of their businesses. Section 199A of the new Tax Cuts and Jobs Act provides that owner(s) of these flow-through entities may be entitled to take a deduction equal to 20% of the entity’s "qualified business income" (“QBI”) earned from the business. Qualified business income can best be described as the ordinary, non-investment income of the business, less any business expenses. QBI excludes passive income like interest, dividends or capital gains. (Read More)

The Tax Cuts and Jobs Act: Offshore Insurance Subsidiaries Dance to a Different BEAT

Congress has come up with yet another good acronym – BEAT (Base Erosion Anti-abuse Tax). As is typically the case, when Congress uses an acronym in legislation, it is inevitably accompanied by complexity. BEAT, as referenced in the Tax Cuts and Jobs Act (the “Act”) is no exception. (Read More)

The Tax Cuts and Jobs Act: What Investors Need to Know

Once upon a time investors had fairly straightforward choices when it came to investing in business. There were C corporations, (“C Corps”) as well as S corporations (“S Corps”), limited liability companies (“LLCs”), partnerships and sole proprietorships. Of course, all of these business organizations still exist, but in the wake of the new Tax Cuts and Jobs Act (the “Act”), the decision as to which type of entity to use as an investment vehicle has become much more complex. (Read More)

Is a C-Corp. Conversion Right for Your Business?

With the steep reduction in the federal corporate tax rate under the Tax Cuts and Jobs Act (the “Act”) recently signed into law, many businesses that operate as tax pass-throughs, such as partnerships, LLCs or S-Corporations (“S-Corp.”), may be considering converting to C-Corporation (“C-Corp.”) status instead.

Under the Act:

• The top federal rate for individuals is reduced from 39.6% to 37% tax on ordinary income such as wages, dividends that are not qualified dividends and short-term capital gains (gains on investment assets held for less than one year). This tax rate will return to 39.6% after 2025 unless the reduced rate is extended or made permanent by subsequent legislation.

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