Most Legal Professionals and Attorneys are high net earners and while that’s great for showing income to a bank for getting a mortgage, it’s not always ideal when it comes to paying taxes. At Interactive Accountants, we’ve helped our attorney clients implement several tax reduction strategies that not only benefit ownership of the firm, but also help with staff retention and new employee attraction.
The first tax planning measure we suggest is to have your company's management team should meet once a year. There are no legal restrictions that your annual meeting must be held at your company's physical location. You may choose the venue of your meeting as long as it is held inside the continental United States or its territories. Travel costs, including your company's annual meeting, are deemed common and essential while doing business away from home. Remember to keep detailed event records and consult with your Interactive Accountants team for further assistance in audit-proofing your annual meeting.
One of the most essential decisions you'll have to make when starting a business is deciding on the proper business entity. It's a decision that has ramifications for a variety of factors, including the amount of taxes you pay, the quantity of paperwork you have to deal with, and the level of personal accountability you face. While not every legal firm is eligible for an S-Corp election, this tax election is available to corporations, LLCs, and PLLCs and is a great method to reduce certain self-employment taxes, which are now 15.3 percent!
Third is implementing a retirement plan. During your retirement years, you will confront a number of crucial concerns that will have an influence on your taxes and general financial well-being. You will be able to roll your workplace retirement plan into an IRA as soon as you retire. If done incorrectly, this can result in a significant tax bill as well as the elimination of the tax-deferred growth and asset protection benefits of retirement funds.
Something is always better than nothing, whether it's a 401k, a Simple IRA, a SEP IRA, or a defined benefit plan. Keep in mind that retirement plans have regulations that must be followed, as well as yearly maintenance charges, so contact your trusted experts at Interactive Accountant for more information and your financial advisor to help you develop the right retirement plan for your Law Firm
Fourth is….well you’re just going to have to contact us if you want to learn more! We have loads more ideas for our attorney clients to take advantage of legitimate deductions that save you money! Here you can read more about our services of Accounting for Legal Professionals and Law Firms
If you are a Lawyer or you have a Law Firm, you need a CPA firm that truly understands what you’re working with, and that firm is Interactive Accountants. So give us a call or schedule a free consultation with our owner Matthew Shiebler, CPA. He’s been practicing accounting for over 25 years now and is a business owner, just like you!