WSJ.com takes a look at how some small businesses are seeking to lower their 2018 tax bills by splitting their company in two, changing their legal status and reclassifying workers. (Note: Don’t try these at home without the hands-on help of your trusted advisors. Even then, if you’re out in front too far, you should expect some future conversations with the IRS .)
“Owners of closely held businesses … are splitting operations apart, reclassifying them and re-categorizing their activities, all in an effort to get as much of their income taxed at the new low rates as possible. The legislation contains more uncertainties than usual for a tax overhaul because of the speed of its drafting, which left little opportunity for the public and congressional scrutiny that often identifies confusion in bills.
“Tax experts are searching for moves business owners can make that will disrupt their businesses the least, while best qualifying for new tax breaks Congress has dangled. The private sector’s old game of cat-and-mouse with the Internal Revenue Service and Congress, in other words, is intensifying, and is likely to play out over years in regulations, audits, appeals, and litigation.”
Continue reading at WSJ.com | “Crack and Pack: How Companies are Mastering the New Tax Code”