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C corporation can be the right choice for many small entities because of the deductions it allows.
A C corporation enjoys a full deduction for the cost of employees (including owner employees) health insurance, group term life insurance up to $50k per employee and even long-term care premiums without regard to age-based limitations.
A C corporation can also deduct the costs of a medical reimbursement plan.
Lower Tax Rates for C Corporations
C corporations enjoy their own graduated rates.
Best of both worlds
Many medical practices can take advantage of both the C corp and S corp by setting up two distinct entities to operate different aspects of their practice. The S corp can be used for the operating side of the practice while the C corp can be used for the management functions. In this way, the medical practice as a whole can take advantage of both the tax deductions afforded a C corp and the flow-through advantages of an S corp.
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Free 30min phone chat with a sr financial advisor at Harding Financial to help you reduce income taxes using a business structure and financial strategies, firstname.lastname@example.org or email@example.com 408-854-1883
Make 2014 and 2015 be the year to protect your wealth and secure your retirement.
The irrevocable life insurance trust is not the only form of trust that’s useful with an estate plan. There are actually several different types of trusts that have important roles to play in the estate planning process.
One of the more popular trusts is the so-called “living trust,” more technically known as an inter vivos trust.
A living trust is a legal document that resembles a will. Like a will, a living trust stipulates how an individual’s assets are to be distributed, and the specific terms of those distribution plans. Unlike a will, however, a living trust operates during the lifetime of the person who set it up.
The intent of a living trust is to manage assets during periods of disability and at death. A common purpose for living trusts is to protect assets should the grantor become mentally or physically incapacitated. That is, it contains detailed instructions for the management of assets should the grantor become disabled, as well as directions for the distribution of assets at death.
Because they stipulate the disposition of assets at death, a living trust must dovetail with the terms of the grantor’s will.
So, let’s sum up the advantages of an irrevocable life insurance trust and see why most feel it is such an important part of any estate plan. . .
An irrevocable life insurance trust can be used by taxpayers who wish to remove not only substantial assets from their gross estates, but also any income from or future appreciation of those assets. This tax benefit is paid for by giving up complete control over the trust and trust assets.
By avoiding the insured’s estate, however, insurance proceeds in an irrevocable trust do not increase the decedent’s estate tax burden. Thus, they can be a source of income for the surviving family, while providing funds to pay estate taxes for the estate, but not from the estate. This can help avoid a forced sale of assets at the grantor’s death. There are some issues that anyone considering an irrevocable life insurance trust will have to evaluate relative to their circumstances. Questions to consider are will there be sufficient cash flow to cover the premiums? Are there enough liquid assets so that the funds contributed to the trust will not be needed for future living costs? You also want to understand the administration issues and costs involved with an irrevocable life insurance trust.
Be sure to get qualified professional help when establishing this or any type of trust.
Seek a lawyer, research and find the best fit for your estate.