IRS Audits

In 2024, IRS audits are expected to become more comprehensive and data-driven, reflecting the agency’s ongoing efforts to enhance compliance and streamline operations. With increased funding and resources, the IRS aims to target higher-income earners and complex tax situations, focusing on areas like cryptocurrency transactions and large business deductions.

Taxpayers can anticipate more sophisticated audit techniques, including the use of artificial intelligence and analytics to identify discrepancies. Additionally, the IRS is likely to increase its emphasis on educational outreach, helping taxpayers understand compliance requirements and reduce errors before audits occur.

Looking ahead, taxpayers should be prepared for potentially more frequent audits, especially if they fall into higher risk categories. Maintaining accurate records and being proactive in tax planning will be essential for navigating the evolving landscape of IRS audits. Overall, the future of IRS audits will prioritize transparency, fairness, and the use of technology to improve efficiency and effectiveness.

Offer in Compromise

Our Offer in Compromise (OIC) services provide a comprehensive solution for individuals facing tax debt challenges with the IRS. We specialize in negotiating settlements that allow you to pay less than the full amount owed, helping you achieve financial relief and peace of mind. Our experienced team conducts a thorough analysis of your financial situation, ensuring that we present a compelling case to the IRS that highlights your inability to pay the full amount. We handle all the paperwork and communications, guiding you through each step of the process. With our expert support, you can navigate the complexities of the OIC process, maximize your chances of acceptance, and ultimately move toward a fresh financial start. Legal Services are provided separately in our office or by zoom with our good friend William Hartsock, Attorney. Click the image to learn more.

Estate Planning: A Comprehensive strategy to manage, distribute wealth and care for loved ones.

Estate planning and trusts involve creating a comprehensive strategy to manage and distribute your assets according to your wishes after you are incapacitated or after your passing. This process includes drafting essential documents such as wills, trusts, health care directives and durable powers of attorney, which help ensure your estate is handled efficiently and in accordance with your preferences.

A trust, in particular, can provide added benefits, such as avoiding probate, protecting assets from creditors, and ensuring privacy in your financial affairs. By engaging in estate planning, you can also address important issues like guardianship for dependents and tax minimization strategies, ultimately providing peace of mind for you and your loved ones. We often help clients with their charitable gifting goals using Charitable Remainder Uni Trusts (CRUTs) which can provide a beneficiary with an income stream while also giving clients current income tax deductions. With thoughtful planning, you can secure your legacy and make informed decisions about your future and the future of your family. Legal Services are provided separately in our office or by zoom with our good friend Kevan McLaughlin, Attorney. Click the image to learn more.

Living trusts and charitable remainder trusts (CRTs) are valuable estate planning tools that serve distinct yet important purposes.

Living Trusts

A living trust is a legal document created during an individual’s lifetime that allows them to place assets into the trust for their benefit while alive and to determine how those assets will be distributed after their death. Here are some key benefits:

1. Avoiding Probate: One of the primary advantages of a living trust is that it can help your heirs avoid the lengthy and often costly probate process, allowing for quicker access to assets.
2. Privacy: Unlike wills, which become public record during probate, living trusts remain private, keeping your estate plans confidential.
3. Flexibility: Living trusts can be altered or revoked at any time while the grantor is alive, providing flexibility in managing assets as personal circumstances change.
4. Incapacity Planning: If the trust creator becomes incapacitated, the successor trustee can manage the trust assets without needing a court-appointed guardian.

Charitable Remainder Trusts

A charitable remainder trust is an irrevocable trust that provides income to the trust creator or other beneficiaries for a specified period, after which the remaining assets are donated to a designated charity. This type of trust offers unique advantages:

1. Tax Benefits: CRTs can provide immediate tax deductions based on the present value of the charitable donation, reducing the donor’s taxable income.
2. Income Stream: The trust can provide a steady income stream to the beneficiaries for a set term or for their lifetimes, making it an attractive option for retirement planning.
3. Charitable Giving: CRTs enable individuals to support charitable causes while also benefiting financially, aligning personal financial goals with philanthropic interests.
4. Estate Planning: By removing assets from the estate, CRTs can reduce estate taxes, allowing more wealth to be passed on to heirs.

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Both living trusts and charitable remainder trusts play crucial roles in effective estate planning. Living trusts provide control, privacy, and efficiency, while CRTs offer a way to blend charitable giving with financial planning. Understanding and leveraging these tools can significantly enhance an individual’s estate plan, ensuring their wishes are fulfilled while optimizing tax benefits and financial security.

Corporations or LLC’s for Liability Protection, Tax Savings & Estate Preservation

Using a Limited Liability Company (LLC) as a holding company for real estate investments is a strategic approach that offers numerous benefits for property owners and investors. One of the primary advantages is the protection it provides against liabilities. By holding real estate within an LLC, investors can shield their personal assets from lawsuits or debts related to the properties. If a tenant were to file a lawsuit or if a property incurs unexpected expenses, the liability is confined to the LLC, safeguarding the owner’s personal finances.

Additionally, an LLC can facilitate more efficient management of multiple properties. When properties are held under a single holding company, it simplifies financial reporting and operational oversight. Investors can track income and expenses more effectively, manage cash flow, and make decisions based on the overall performance of their real estate portfolio. This centralization can also make it easier to secure financing or negotiate deals, as lenders often prefer to work with established entities rather than individual owners.

Tax benefits also make using an LLC attractive for real estate holding. LLCs can elect to be taxed in various ways such as a sole proprietorship, a partnership, an S Corporation or a C Corporation. They are typically subject to pass-through taxation, which means profits and losses are reported on the owners’ personal tax returns. This can help avoid the double taxation that often occurs with traditional corporations. Moreover, real estate investors can take advantage of various tax deductions, such as depreciation and operational expenses, which can further enhance their financial returns.

Finally, structuring an LLC as a holding company allows for greater flexibility in ownership and succession planning. Investors can easily add or remove members, transfer ownership stakes, or pass assets to heirs without incurring significant tax implications. This flexibility makes it easier to adapt to changing investment strategies or personal circumstances, ensuring that the real estate portfolio remains aligned with the owner’s goals over time. Overall, using an LLC as a holding company for real estate is a sound strategy for protecting assets, optimizing management, and enhancing financial efficiency.

There are no referral agreements between Encompass Financial Services or Solstice Tax Solutions Inc. and neither William Hartsock Attorney nor Kevan McLaughlan attorney.