Tax Law
The complexity of tax law cannot be overstated. The federal tax code occupies more than 1,000 sections of the U.S. Code. The accompanying tax regulations consume more than 10,000 pages of the Code of Federal Regulations. There are tens of thousands of cases at administrative and judicial levels interpreting those statutes, regulations, and other cases.
Did the last major tax change, the 2017 Tax Cuts and Jobs Act (“TCJA”), make the tax law any simpler? No, but there are some interesting planning ideas one should consider with the new law. The TCJA sets the C-corporation tax rate at 21%. The highest marginal income tax rate for an individual is 37%, which may entice taxpayers to contemplate using a C-corporation in their tax and business structure. A C-corporation pays income tax, but the shareholders pay a second tax on distributions from the corporation (called dividends). The dividend is taxed at rates of 0%, 15%, or 20%, depending on the taxpayer’s tax bracket (another tax of 3.8% could apply due to the Obamacare Net Investment Income Tax). That is the “double layer” of taxation that many privately-held companies and individuals have historically avoided. However, for small businesses that desire to pay a lower tax on income at 21% and defer making dividends for some period of time, the C-corporation may make a comeback. Will Congress extend the law? We may have to wait all of 2025 to find out.
It is a great and important time to review your income tax planning and structure. Our tax attorney can review your situation for tax planning and asset protection. James Law Firm advises clients on the following types of taxation matters, among others:
Planning Ahead Your Transactions and Matters
Our tax attorney is uniquely well-positioned to provide you with the guidance and expertise you need for tax planning and the execution of transactions with tax implications. He has a degree in accounting, a Master’s degree in taxation, and a LL.M. in tax law. In addition, he has worked as general counsel of a chemical company and a construction company, providing him with a wealth of real world experience to go along with his academic and practical knowledge of tax law.
James Law Firm, P.L.L.C., can help individuals and businesses with federal and state tax planning, including income, franchise, and estate tax planning.
The Danger of Payroll Taxes
Payroll taxes are collected by a business for its employees. It is crucial that collection and remittance of the tax to the IRS be done correctly and in a timely manner. The Internal Revenue Service (IRS) imposes a fiduciary duty on employers, and certain owners and managers, as individuals, with regard to this tax, and failure to collect and pay this tax can lead to severe penalties and the risk of criminal charges. Our lawyer can advise you if the IRS has looked to you for payment of payroll taxes.
Deferring Tax
Mr. James can advise clients with deferring capital gains tax on real estate with a Section 1031 transaction (also known as a like kind exchange) or an investment in a qualified opportunity zone. Mr. James can locate an investment for a client in an opportunity zone, negotiate and document the deal, advise the client about the tax law’s complicated requirements, and form the qualified fund necessary to own the qualified opportunity zone business property. Further, with his new company, Straight Path Diligence, LLC, it can develop the property for the owner.
Contact Us For Knowledgeable Tax Advice Dealing with tax planning and tax transactions demands a high degree of familiarity with tax law, both Texas and federal. Contact our office in The Woodlands at 832-764-7885 or use our online
The complexity of tax law cannot be overstated. The federal tax code occupies more than 1,000 sections of the U.S. Code. The accompanying tax regulations consume more than 10,000 pages of the Code of Federal Regulations. There are tens of thousands of cases at administrative and judicial levels interpreting those statutes, regulations, and other cases.
Did the last major tax change, the 2017 Tax Cuts and Jobs Act (“TCJA”), make the tax law any simpler? No, but there are some interesting planning ideas one should consider with the new law. The TCJA sets the C-corporation tax rate at 21%. The highest marginal income tax rate for an individual is 37%, which may entice taxpayers to contemplate using a C-corporation in their tax and business structure. A C-corporation pays income tax, but the shareholders pay a second tax on distributions from the corporation (called dividends). The dividend is taxed at rates of 0%, 15%, or 20%, depending on the taxpayer’s tax bracket (another tax of 3.8% could apply due to the Obamacare Net Investment Income Tax). That is the “double layer” of taxation that many privately-held companies and individuals have historically avoided. However, for small businesses that desire to pay a lower tax on income at 21% and defer making dividends for some period of time, the C-corporation may make a comeback. Will Congress extend the law? We may have to wait all of 2025 to find out.
It is a great and important time to review your income tax planning and structure. Our tax attorney can review your situation for tax planning and asset protection. James Law Firm advises clients on the following types of taxation matters, among others:
- Federal income tax law, including individual tax matters, 1031 exchanges, c-corporations, s-corporations, partnerships, and international tax planning
- Federal estate, gift, and generation skipping transfer tax
- Texas franchise tax
- Texas sales and use tax
Planning Ahead Your Transactions and Matters
Our tax attorney is uniquely well-positioned to provide you with the guidance and expertise you need for tax planning and the execution of transactions with tax implications. He has a degree in accounting, a Master’s degree in taxation, and a LL.M. in tax law. In addition, he has worked as general counsel of a chemical company and a construction company, providing him with a wealth of real world experience to go along with his academic and practical knowledge of tax law.
James Law Firm, P.L.L.C., can help individuals and businesses with federal and state tax planning, including income, franchise, and estate tax planning.
The Danger of Payroll Taxes
Payroll taxes are collected by a business for its employees. It is crucial that collection and remittance of the tax to the IRS be done correctly and in a timely manner. The Internal Revenue Service (IRS) imposes a fiduciary duty on employers, and certain owners and managers, as individuals, with regard to this tax, and failure to collect and pay this tax can lead to severe penalties and the risk of criminal charges. Our lawyer can advise you if the IRS has looked to you for payment of payroll taxes.
Deferring Tax
Mr. James can advise clients with deferring capital gains tax on real estate with a Section 1031 transaction (also known as a like kind exchange) or an investment in a qualified opportunity zone. Mr. James can locate an investment for a client in an opportunity zone, negotiate and document the deal, advise the client about the tax law’s complicated requirements, and form the qualified fund necessary to own the qualified opportunity zone business property. Further, with his new company, Straight Path Diligence, LLC, it can develop the property for the owner.
Contact Us For Knowledgeable Tax Advice Dealing with tax planning and tax transactions demands a high degree of familiarity with tax law, both Texas and federal. Contact our office in The Woodlands at 832-764-7885 or use our online