How Corporate Tax Cuts Help your New ROBS Corporation | Frank Selden Law

How Corporate Tax Cuts Help your New ROBS Corporation

The tax changes for corporations passed in 2018 a great year to start your ROBS funded corporation! Why? Glad you asked! Here are the Selden notes. Like Cliff notes, except my name isn’t Cliff, and he is already using that name for his notes.

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Corporate Tax Cuts # 1 – The Rate

The tax rate for big businesses decreases from 35 percent to 20 percent in 2019, a large reduction that would put the U.S. corporate tax rate at a lower level than many other foreign nations. Currently, many of my clients plan company spending (including their own personal salary) to minimize, if not eliminate, their corporate taxes. Still a consideration, but not as serious given the next issue.

Corporate Tax Cuts # 2 – Depreciation

Mention the word “depreciation” to most accountants and they will grimace. Why do we need to follow the complicated set of depreciation rules for different assets? Because Congress said so. Thankfully, Congress changed its collective mind. Companies will be able to write off most of their expenses for new buildings and other investments for the next five years. No more need to choose which assets to buy based on depreciation schedules versus the corporation's need for deductions. high earnings this year? Want to expand for new growth? More $$ to spend when one does not have to factor is the taxes owed on money spent because of depreciation schedules.

Corporate Tax Cuts # 3 – Foreign Assets

The tax bill shifts the tax system on businesses from a worldwide system in which U.S. companies are taxed on all income earned all over the world to a territorial system where businesses are mainly taxed on their earnings in the United States. I have very few clients who create income overseas, but for the ones who do, this is a long-awaited change. We are the only industrialized country that taxed its citizens and corporations on a worldwide system.

Consult your CPA for the latest advice on how taxes will affect your corporation. Consult with us for the best way to fund your corporaiton with your own retirement funds. Download our ebook or book an appointment here!


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