Is it time to reclassify my business structure?

One of the most important things a Quincy entrepreneur has to decide is what structure to employ. The choices are many. The implications of making a mistake right out of the gate are significant. Working with an experienced business law attorney is a wise way to avoid missteps.

Right now is a particularly difficult moment in time to be confronting this kind of question. The Trump administration has pledged tax reform and recently issued a few bullet-point notions of what that might look like. What that outline presents and what might result from the deliberations of Congress is impossible to know. In the midst of that void, some experts speculate.

One observer says the Trump proposal to reduce the taxes on limited liability corporations and partnerships could mean that, "Everyone and their dog will be filing as an LLC.” That's because audits examining the legitimacy of business classifications takes a lot of IRS time and energy. And because of previous budget cuts, the agency doesn't have the people in place to mount such audits.

That might suggest that the time is right for such a classification or reclassification. But it might be good to remember that the U.S. government is notoriously adept at finding ways to overcome potential hurdles when its interests are at stake. Consider the transformation of the country's military power after the attack on Pearl Harbor.

Considering the broad tax implications that attach to any business structure, it's important to be sure you have an understanding of which apply to your particular situation. And in the likely event that there is more than one to choose from, it's important to examine them all from a strategic perspective, including anticipating the possible effects of what could happen as a result of reform action in Washington.

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