-
Help ensure your partnership or LLC complies with tax law
October 1, 2024
Categories: Guaranteed Payment, LLC, Operating Agreements, Partnership
When drafting partnership and LLC operating agreements, various tax issues must be addressed. This is also true of multi-member LLCs that are treated as partnerships for tax purposes. Here are some critical issues to include in your agreement so your business remains in compliance with federal tax law. Identify and describe guaranteed payments to partners For income tax purposes, a guaranteed payment is one made by a partnership that’s: 1) to the partner acting in the capacity of
-
Reasons an LLC might be the ideal choice for your small to medium-size business
September 25, 2024
Categories: LLC, pass-through deduction, QBI
Choosing the right business entity is a key decision for any business. The entity you pick can affect your tax bill, your personal liability and other issues. For many businesses, a limited liability company (LLC) is an attractive choice. It can be structured to resemble a corporation for owner liability purposes and a partnership for federal tax purposes. This duality may provide the owners with several benefits. Like the shareholders of a corporation, the owners of an LLC (called members rather
-
Navigating tax complexities: Craft partnership agreements and LLC operating agreements with precision
September 17, 2024
Categories: LLC, Operating Agreements, Schedule K-1
Partnerships are often used for business and investment activities. So are multi-member LLCs that are treated as partnerships for tax purposes. A major reason is that these entities offer federal income tax advantages, the most important of which is pass-through taxation. They also must follow some special and sometimes complicated federal income tax rules. Governing documents A partnership is governed by a partnership agreement, which specifies the rights and obligations of the entity and