Riley Bennett Egloff Magazine April 2018 | Page 18

resources.
2.
An accountant may further
advise a client how to go about
paying off outstanding debts but
may not be mindful of the legal
eff ect by favoring certain creditors
in advance of other creditors. The
uninformed business owner who
gets too creative and favors creditors
while
experiencing
fi nancial
diffi culties could be creating greater
fi nancial issues. Favored payments
could be subject to being taken back
by a Court or Bankruptcy Trustee as
a preference payment. The client
and accountant should consult
with the knowledgeable attorney in
analyzing how to make proper and
timely payments. With such a client-
centered approach, that same client
could work to pay obligations while
navigating this legal minefi eld of
unintended preferential payments.
qualifi ed. Clients should review
operating agreements and other
organizational documents to ensure
compliance with new tax laws.
Properly analyzing compliance
while minimizing a business’s tax
liabilities requires cooperation
between the attorney and accountant
working with the mutual client’s
best interest in mind.
4.
Not that a business ever expects
to be charged with allegations of
sexual harassment, but if such
a charge were to be lodged and
the business decides to settle,
the business better be aware of
changes in the law. For instance,
companies can no longer deduct any
settlements, payouts, or attorneys’
fees related to sexual harassment
if the payments are subject to
non-disclosure agreements. Any
business client considering such
a settlement should involve its
If you have not been living under attorney and accountant to consider
a rock, you may have heard that there the legal and tax eff ect of such a
are tax reforms eff ective for 2018. settlement.
One very important modifi cation
Certain tax deductions have now
now permits S-Corporations, LLCs
partnerships, and other fl ow-through been eliminated, such as employer-
entities to qualify for a deduction provided parking and entertainment
of 20% of their qualifying income expenses incurred in the course
from taxation if they meet certain of business. Food and beverage
criteria. Planning is important for expenses that qualify under the
clients with fl ow-through entities so old rules remain 50% deductible.
that they can get the most out of this Knowing how to apply these
provision in the law. For example, deductions and the eff ect on each
for LLCs taxed as a partnership, business are primarily a concern
guaranteed payments are not for the accountant; however,
qualifi ed business income whereas attorneys should participate in
ordinary business income can be advice regarding the eff ect of not
3.
5.
18
Riley Bennett Egloff LLP - April 2018
now permitting certain previously
permissible deductions on employee
relations.
6. Under the new tax reform bill,
individuals now have an $11.2
million lifetime inheritance tax
exemption and married couples
can exclude inheritances of $22.4
million.
These amounts have
doubled over 2017 limits. These
estate tax changes should invite
conversations between accountants
and attorneys as to the best business
and estate planning mechanisms to
use clients.
Conclusion
Although this list of laws is by
no means exhaustive, it should
illustrate the benefi ts of business
clients taking a proactive approach
to the legal environment and
encourage an open, client-centered
dialogue between professional
advisors. There are no guarantees
that if professional advisors work
together, the business will succeed.
However, there is a greater certainty
that when business advisors are
willing and encouraged to work
together in unison to promote a
client’s business, the business is far
more likely to prosper.