Planning for YOU!

In this month’s Newsletter, I bring you insights on business structuring, different types of business structure so you can choose the one that best fits your needs, and a monthly roundup of how you must organize your documents today for a stress-free tax season tomorrow.

A business structure defines the legal and organizational setup of a company. It affects things like taxes, liability, and management. Different types of business structures are:

1. Sole Proprietorship: One owner, simple setup, personal liability for business debts.
2. Partnership: Two or more owners, shared profits and responsibilities, personal liability.
3. Limited Liability Company (LLC): Combines flexibility with limited liability; owners are protected from personal liability.
4. Corporation: A separate legal entity; shareholders have limited liability, and it's more complex to set up and manage. There are types like C-Corporation and S-Corporation, which differ in tax treatment.
5. Nonprofit: Organized for charitable, educational, or other purposes; profits are reinvested in the organization rather than distributed to owners.

Wishing you clear thoughts and confidence as you choose a business structure. May your choices help your business grow and succeed!

5 Tips To Organize Your Tax Documents Efficiently.

Organizing your tax documents doesn't have to be a headache.

1. Use?separate bank accounts and credit cards for business and personal expenses. This keeps everything clear and organized.
2. Label your folders with categories like "Receipts," "Income Statements," and "Deductions." This way, you’ll know exactly where to find everything.
3. Keep a tax calendar for filing deadlines, estimated payments, and receipt of W-2s or 1099s to stay organized and avoid last-minute rushes.
4. Set aside funds regularly for estimated tax payments. This avoids surprises and penalties at tax time.
5. Regularly review tax deductions relevant to your industry or business type. This ensures you claim all eligible deductions.

Organizing your tax documents is a strategy for financial clarity and compliance. Use these tips to stay prepared year-round.

Important Modifications to Connecticut Tax Provisions

New legislation brings important updates to Connecticut’s tax rules, starting January 1, 2025. Here’s what you need to know:

1. Retirement Income Withholding: Taxes won’t be automatically withheld from your retirement income (like pensions or IRAs) unless you ask. If you don’t request withholding and take a large lump sum (over $5,000 or half of your account—whichever is less), the highest tax rate will apply.
2. Extended Net Operating Losses (NOLs): Businesses can now carry forward their losses for up to 30 years. This change is to support startups and businesses in fields like life sciences and technology, making it easier to manage early losses.
3. JobsCT Tax Rebate Program: Companies can qualify for tax credits by creating or keeping 15 new full-time jobs, down from 25, if at least three employees live in high-poverty areas. Also, there's a new credit covering 50% of income tax withheld for each new employee in these areas.

Quote of the Month

"I hate paying taxes. But I love the civilization they give me."? – Oliver Wendell Holmes Jr.

Feel free to reach out if you’ve any concerns.

Here’s to financial success!