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New York business owners need to consider taxes in estate plans

Many New Yorkers will want to learn about the intricacies of new tax laws taking effect this year. This year some important new rules are in play and learning how to take advantage of different parts of the tax code can be key in minimizing your tax obligations.

As of 2013, a section of the Affordable Care Act will allow business owners a substantial tax break if they can demonstrate that they are actively involved in running their business. This means that all owners will have to document the work that they do, and the time they spend on business-related activities every day.

For some business owners, this new law will only require minor adjustments in their schedules or plans. For example, one way to prove that you are actively involved in your business is to prove that you worked at it for at least 500 hours in a year. Some owners may be able to engage in a few extra hours every week and enjoy these tax benefits.

Questions about taxation and the hypothetical situation offered above provide an important insight into paying taxes and trying to minimize what you owe. Considering such tax implications is important for business owners who are deciding how to include their businesses in an estate plan.

When analyzing and assessing the tax burden associated with passing down your family business or business interests, it may be wise to consider consulting with a skilled elder law attorney who can help you determine the future of such an important asset.

Source: 

The Wall Street Journal, “Skirting the New Investment Tax,” Arden Dale, May 16, 2014

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