You know the old saying: “Debt forgiven is income earned.” The IRS agrees. But like most things in the tax world, the truth depends on why and how that debt disappeared.
IRS Expands Business Tax Account Online Services
You know the old saying: “Debt forgiven is income earned.” The IRS agrees. But like most things in the tax world, the truth depends on why and how that debt disappeared.
The IRS Is Automating First-Time Penalty Relief – But Do Not Ignore the Notice
You know the old saying: “Debt forgiven is income earned.” The IRS agrees. But like most things in the tax world, the truth depends on why and how that debt disappeared.
From “Just Sold” to Tax Strategy: How a Commercial Property Acquisition Can Create Immediate Cash-Flow Benefits
You know the old saying: “Debt forgiven is income earned.” The IRS agrees. But like most things in the tax world, the truth depends on why and how that debt disappeared.
When the IRS Starts Collecting: Why Taxpayers Should Not Wait to Respond
You know the old saying: “Debt forgiven is income earned.” The IRS agrees. But like most things in the tax world, the truth depends on why and how that debt disappeared.
The Magic of Form 2848: Why an IRS Power of Attorney Matters More Than Most Taxpayers Realize
You know the old saying: “Debt forgiven is income earned.” The IRS agrees. But like most things in the tax world, the truth depends on why and how that debt disappeared.
The Deduction Most CPAs Are Missing
The Deduction Most CPAs Are Missing
By Brian Wheeler, Director of Wealth Management & Business Brokerage
Tax-deductible premium… tax-free benefit?
It sounds like one of those ideas that’s too good to be real. But in the right structure, it exists. And most business owners—and frankly, most advisors, including CPAs—aren’t talking about it.
Where This Actually Shows Up
We spend a lot of time with business owners talking about:
- Reducing taxes
- Protecting wealth
- Creating flexibility down the road
What gets missed is how those three can sometimes work together in one decision. Long-term care planning is one of those areas. Not because it’s exciting—but because it’s often ignored until it becomes a problem.
A Different Way to Think About It
Instead of asking: “Should I buy long-term care insurance personally?”
There’s a better question: “Is there a smarter way to fund this through the business?”
In certain cases—particularly with C-Corporation structures—the answer can be yes.
A real example e recently reviewed a case involving:
- 59-year-old business owner
- Premium: ~$51,000/year for 5 years
Here’s where it gets interesting:
- $44,000 per year was deductible to the business
- No taxable income to the owner/employee
Let that sink in for a moment.
The business funds the premium, takes the deduction, and the individual isn’t taxed on the benefit.
What Does That Actually Buy?
By age 85:
- $2.9 million in tax-free long-term care benefits
And if care is never needed?
- The premiums paid (~$259,000 total)
- Convert into a tax-free death benefit to beneficiaries
No market risk. No “use it or lose it.” Just a different way to think about protecting future costs.
“But I Don’t Have a C-Corp…”
That’s usually the first reaction. And it’s fair—most closely held businesses are S-Corps.
But here’s where it gets more practical:
Some owners already have management or service entities taxed as C-Corps.
Others may have planning opportunities depending on their structure.
In certain cases, this can also be used as a retention strategy for key employees.
Think of it as more efficient alternative to cash compensation— one that protects the employee and creates tax leverage for the business.
Why This Gets Missed
It sits in the gap between:
- tax planning
- insurance planning
- long-term wealth strategy
Which means it often falls into the category of: “Everyone kind of knows about it… but no one is actually implementing it.”
Final Thought
This isn’t for everyone. But it’s a good example of a broader idea:
Sometimes the most valuable planning opportunities aren’t about finding new investments…
They’re about using the structure you already have more effectively.
If you’re curious whether something like this could apply to your situation, we’re happy to take a look.
No pressure—just a conversation to see if it fits.
From Small Business to Big Shelves: Why Fixed Asset Records Matter More as You Scale
You know the old saying: “Debt forgiven is income earned.” The IRS agrees. But like most things in the tax world, the truth depends on why and how that debt disappeared.
The Importance of Proper Financial Planning Before Selling Your Business
The Importance
of Proper Financial Planning Before Selling Your Business
Planning to sell your business is a significant decision that requires meticulous preparation, particularly in the financial realm. Proper financial planning is vital to ensure a smooth and successful transition and to maximize the value of your business. Keystone CPAs, with their deep understanding of the critical role that financial planning plays in selling a business, are here to offer essential tips that will guide you through this important phase, instilling confidence in your financial planning.
Understanding the Value of Your Business: As a business owner, your role is crucial in preparing to sell your business. One of the initial steps is obtaining a comprehensive understanding of its value. Keystone CPAs advise engaging in a thorough business valuation to accurately assess the worth of your company. This assessment, in which you play a crucial part, will serve as a foundation for setting a realistic selling price and understanding potential areas for improvement to enhance the value of your business. Financial Documentation and Reporting: Organized and accurate financial documentation is essential when selling your business. Keystone CPAs emphasize the importance of maintaining detailed financial records and reports to provide prospective buyers with a clear and transparent insight into your company’s economic health and performance. This includes financial statements, tax records, profit and loss statements, and other pertinent financial documents.
Tax Planning and Optimization: Proper tax planning is crucial when selling a business. Keystone CPAs advise business owners to engage in tax optimization strategies to minimize tax liabilities and maximize the after-tax proceeds from the sale. Understanding the tax implications of the sale and implementing tax-efficient strategies can significantly impact the financial outcome of the transaction.
Financial Forecasting and Projections: Prior to selling your business, creating detailed financial forecasts and projections can be invaluable in demonstrating the future potential and profitability of your company to potential buyers. Keystone CPAs recommends preparing realistic and data-driven financial projections that align with the growth trajectory of your business, providing a compelling case for its future success. This forward-looking approach can instill a sense of hope and optimism in the business owner.
Exit Strategy and Succession Planning: Crafting a well-defined exit strategy and succession plan is fundamental to proper financial planning before selling your business. Keystone CPAs stress the importance of outlining a clear path for the transition of ownership and leadership, ensuring a seamless transfer of control and responsibilities.
In conclusion, selling a business demands meticulous financial planning and strategic decision-making. Keystone CPAs understand the complexities involved in this endeavor and offer invaluable guidance to business owners embarking on this important journey. By leveraging their expertise and following these essential tips, business owners can navigate the financial aspects of the sale with confidence, ultimately achieving a successful outcome.
Keystone CPAs stand ready to assist business owners in achieving their financial objectives. Contact us today to learn more about preparing your business for a successful sale.