Death Tax Does Not Have to Kill Your Small Business

Death Tax Does Not Have to Kill Your Small BusinessWorrying about taxes is part of small business planning. Often, a central consideration is how a small business can minimize the burden that taxes place on the ability of a small business to operate normally.

Fortunately, a DuPage County small business attorney can offer a variety of alternatives designed to alleviate tax burdens. Though there are several taxes that may affect a small business, one topic that has gotten some attention lately is the effect of the estate tax on a small business.

The estate tax, colloquially (and somewhat amusingly) referred to as the “death tax,” is a tax on estates that people leave behind at death. It takes into account everything that someone leaves behind, including business interests. The most recent budget deal, made permanent the provision of the U.S. Tax Code that exempts estates that are worth less than $5.25 million, but any portion above that is subject to a 55% tax rate.

Every so often, there is heated debate on the merits of this tax, but as long as it is around, a small business owner must prepare for it. Unfortunately, some business owners do not, which means that the small business may have to be liquidated to pay for the tax. The IRS allows for periodic payments, but such arrangements can have an adverse effect on a business’s ability to operate.

Fortunately, there are options which Illinois small business attorneys can provide a small business owner to assist with proper tax planning. With careful planning, the attorney can assist the small business owner in reducing the estate so it does not surpass the exemption amount by taking advantage of every deduction available.

Tax planning is important in order to keep your business running smoothly. If you have questions, do not take a chance. Contact an experienced Illinois small business attorney.