April 2023

Pratt and LeFevre Corporation
https://prattandlefevre.com/contact-us/
450 Simmons Way, Suite 760,
Kaysville, Utah 84037
833-722-8848

IMPROVING YOUR FINANCIAL LITERACY CAN BOOST YOUR BUSINESS' BOTTOM LINE

National Financial Literacy Month reminds us how important financial knowledge and management is. Entrepreneurs need to have a solid understanding of their financial situation. Especially since finances play a vital role in the success of a business. This month, we should take the time to assess our current financial status. We should also analyze our cash flow. Then we can make informed decisions that will benefit our business in the long run. It doesn't matter how long we have been in business. It is never too late to educate ourselves on financial literacy. Seek out professional advice if needed.

National Financial Literacy Month also highlights financial literacy among our employees. Encourage financial literacy education. Provide resources for financial management. Those can be valuable assets to our team. We have a responsibility to create a supportive environment that fosters financial literacy. Look for personal opportunities for growth in financial literacy. This can include attending financial management workshops or seminars. You can search for shared educational resources. Speak with financial professionals to encourage your own savings and responsible spending. By prioritizing financial literacy, we can benefit our business. We can also contribute to the financial well-being of our community!

BUSINESS SCHEMES TARGETING NEW COMPANIES

New companies need to be aware of business schemes, which target newly created companies. The schemes cite statutory requirements or indicate there are more steps you need to take in order to be compliant in your state as a new company.

These mailings are solicitations. The company must indicate they are not a government entity for it to be legal.

The Pratt and LeFevre Corporation wants you to be aware of these targeted schemes before they hit your mailbox.

For Your Information:

1. Once you submit Articles of Registration and receive a certified filed document, no other action is necessary until changes are made to the Articles of Registration or you need to file an annual report.
2. In most states, Certificates of Existence are ordered online from the Secretary of State’s website and printed from your computer. They are ordered for specific reasons, for example, if you are registering in another state to do business. That state will require a Certificate of Existence from the current state in which the company is registered.
3. Minutes of meetings are taken at the time of the meeting and placed into the business entity records.
4. File Annual Reports online directly with the State’s Office. A third party will only file the Annual report if you have hired them to do so. That is your decision.

WHAT NON-TAX LAWYERS SHOULD KNOW ABOUT LLC TAX (excerpts)

BY JOHN M. CUNNINGHAM (MANCHESTER),
17 FEBRUARY 2023

The following are some excerpts from an article written by John M. Cunningham. From time to time, Pratt & LeFevre passes along information to you from our own internal research and development. The following excerpts are worth sharing in the author’s own words.

"Most single-member LLCs should be subject to federal taxation as tax sole proprietorships. However, a small number of them should instead be taxable as S corporations or even as C corporations. The often-complex task of choosing among these three federal tax regimens for a single-member LLC in formation is called "tax choice of entity." No LLC founders should form single-member LLCs without first having a tax expert provide them with a tax choice of entity."

Pratt & LeFevre agrees that experts should provide guidance when selecting the tax choice of your LLC. We happen to feel very strongly that single-member LLCs are not a good choice, and that S corporation tax status puts the small business owner in a precarious predicament.

"On tax choice of entity grounds, most multi-member LLCs should be taxable as partnerships under IRC Subchapter K, but a few should, instead, be taxable as C or S corporations. Founders of these multi-member LLCs must also retain tax experts to provide them with a tax choice of entity."

Again, Pratt & LeFevre agrees that LLC founders should consult with experts when making their decisions. Pratt and LeFevre Corporation believes there are 28 disadvantages and only 1 advantage to being an S Corporation. If you want a copy of that list please contact Daniel McCraine, our National Sales Director. We stand available to help explain the options and guide you through the choices.

"… a little-known but powerful proposed IRS proposed [sic] regulation designated Prop. Reg. § 1.1402(a)-2 (Prop. Reg.) can enable individuals who are members of multi-member LLCs taxable as partnerships to greatly reduce their SET [Self-Employment Tax] liability on their LLC income. These individuals should consult with a tax professional with Prop. Reg. expertise expert on how to structure their operating agreements to take full advantage of this regulation."

Pratt & LeFevre already includes this advice to our clients who we meet with for bookkeeping, accounting, financial oversight, or Corporate Strategic Advising. If you are not signed up for these services contact Daniel McCraine, our National Sales Director at: Danielm@prattandlefevre.com or 833-772-8848, x. 709

Additionally, there are tax favorable deductions to businesses in the Tax Cuts and Jobs Act of 2017, Section 199A. Again, your Pratt & LeFevre advisor can guide you through this complex provision to achieve the maximum tax advantage.

Have you been to our website lately?

Meet our team specialists at https://prattandlefevre.com/our-specialists/

Each of our specialists follow the O.N.C.E. (Own Nothing, Control Everything) Process in their own business. Our team has their own successful business and contracts with Pratt and LeFevre Corporation to work with clients, bringing their expertise in business, accounting, taxes, financing, marketing and more. Visit our website today to learn more about Pratt and LeFevre Corporation team of specialists ready to work with you.

In addition, you can read all of the back issues at www.prattandlefevre.com/newsletters-2/

Pratt and LeFevre Corporation
https://prattandlefevre.com/contact-us/
450 Simmons Way, Suite 760,
Kaysville, Utah 84037
833-772-8848