A tax lawyer in Indianapolis, IN knows that no one enjoys paying taxes. For the most part, everyone either lets their employer take taxes out or begrudgingly sets tax money aside from their paycheck if they are self-employed. However, when you are dealing with your own taxes and run into problems, what should you do? Hope that it works itself out? Hope you do not get flagged? Unfortunately, even accidental errors in taxes could mean penalties or worse punishments, which is why if you are facing problems with your taxes you should turn to a team you can trust from Dickmann Reason Bogigian & White.
Shouldn’t I hire a CPA if I run into problems?
Many people believe that if they run into a tax snag they can rely on a CPA to help them out of a sticky situation. While CPAs can be fantastic assets when it comes to financial planning and making important financial decisions, you will not necessarily want to rely on them for taxes because they may not be keeping up with the constant changes in taxes. If you work with a trusted tax lawyer in Indianapolis, Indiana, you know that you can get help if you are struggling with:
- Alleged tax fraud
- Tax disputes
- Tax laws regarding businesses
- Taxes related to estate planning
When should I start working with a tax lawyer?
There are many times when you may decide you should work with a tax lawyer. For example, if you are hoping to correct a tax mistake but are not getting a response from the IRS, your attorney can write a letter that is sure to get their attention. You may also wish to work with an attorney if:
- You are planning to file a lawsuit against the IRS or if they are filing a suit against you
- The IRS is investigating you
- The IRS is auditing you
What is the biggest difference between a CPA and a tax attorney?
The biggest difference (and one that may be important to you) is that you get attorney-client privilege when you work with a tax lawyer, not with a CPA. Thus, a tax lawyer will not testify against you if you go to court.
Making sure you stay above board with taxes is not always easy, but an attorney can help. Reach out to a trusted Indianapolis, Indiana tax lawyer you can rely on today.
Other Reasons to Speak with a Tax Lawyer
Although each seasoned Indianapolis, IN tax lawyer at our firm is dedicated to assisting clients who may be having legal tax issues, our team is also dedicated to helping our clients protect their hard-earned assets from the “tax collector.”
After decades of hard work and careful spending, now is your time to sit back and enjoy the wealth you have created for yourself and your family and know that when you pass away, your loved ones will be financially safe and looked after. However, without careful estate planning, your beneficiaries could end up with just a fraction of what you left behind.
Estate tax and annual and lifetime gift taxation can cut into your estate’s assets if you do not take steps now to protect and properly manage your wealth. A skilled tax lawyer can explain the various types of trusts and other methods used to keep your hard-earned wealth in the family.
An Indianapolis, IN tax lawyer knows that while Indiana residents do benefit from the state not having an estate tax like some other states, there is still the federal estate tax that can cut quite the swath in a person’s estate.
One way to reduce the size of your taxable estate, and to keep funds in the family instead of going to the government, is to set up a Family Limited Partnership (FLP). In an FLP, each family member buys units or shares of the business and can profit in proportion to the number of shares they own, as outlined in the partnership operating agreement. An FLP serves multiple purposes: it pools certain family members’ money together for the intent of starting up a business venture that one party alone could not afford, and it is a valuable estate tax avoidance tool.
Transferring Shares to Family Members Using the Annual Gift Tax Exclusion
As an estate planning tool, an FLP reduces the size of your taxable estate from year to year by the process of making gift deposits into the fund for each of your beneficiaries. You can give up to the annual gift tax exclusion each year, which is $15,000 for an individual and $30,000 for a couple currently according to the IRS (in 2021), without being taxed.
Moreover, your beneficiaries would be able to reap the profit from dividends and interest that the FLP generates without having those profits be taxed either. Why is an FLP better than just making the annual gift tax exclusion each year? There are a number of reasons, including the following:
- The assets are safe from creditors who come calling when you are gone.
- The assets are safe from all non-family members, such as an ex-spouse.
- As the general partner in the FLP, you retain control of the assets within the fund during your lifetime.
- You can control when and even how the assets are used. For example, you make it so that your grandchildren do not have access to their assets until they are 25, or whatever age you see fit.
To learn more about how an FLP may be able to benefit your family, contact Dickmann Reason Bogigian & White to schedule a consultation with a skilled Indianapolis, IN tax lawyer.