Business Tax Planning
Expertise beyond tax return preparation.
Saving taxes and keeping the IRS at bay is what most people want. Our approach is to take an active role in the reduction of federal, state and local taxes. Our senior tax people have substantial experience and training in complex areas of corporate and business taxation, partnerships, joint ventures and LLCs, individual and trust taxation and estate planning. We keep abreast of the changing tax laws and we keep our clients informed of current tax issues, new regulations and planning opportunities.
Although we are a local firm, we work with many companies that have locations throughout the country and around the world. Because of this, we have developed an unusually high level of expertise in the area of state and local taxes. This expertise extends beyond the mere preparation of such tax returns to the planning needed to minimize the total state and local tax burden.
The Legal Right of a Taxpayer
“To decrease the amount of what otherwise would be his taxes, or altogether avoid them, by means which the law permits, cannot be doubted.” — Gregory vs. Helvering 293 U.S. 465 55 Supreme Court Reporter 266
Individual Tax Return Preparation
Save time. Save money.
When we asked our clients why they use Dugan & Lopatka, to prepare their tax returns, the answers varied, but generally came down to these two, simple reasons:
- Time Savings. Tax returns are complex, take a good deal of time to fill out correctly and in many cases, our clients’ business and personal tax returns are intertwined. Our clients felt that they needed the help of tax professionals.
- Money Savings. The tax laws and regulations change almost daily. Keeping up with the changes can mean the difference in paying more taxes or less. Our clients wanted reliable counsel to guide them through the complex and ever-changing tax rules to find ways to reduce their tax burden. Our clients want to pay their fair share, but no more than is required.
Succession & Ownership Transfer
You put a lot of thought into starting a business, but have you thought about how you are going to get out? Too many business owners fail to plan for their exit and as a result, aren’t as successful in doing so.
Whether your successor will be your children, a key employee or an outside buyer, Exit Planning helps you maximize your financial return, avoid legal pitfalls and minimize your tax liability when you transfer your business. If you die or become disabled before you retire, Exit Planning will help the business survive your departure – enabling you and your family to receive its full value.
Creating and implementing an Exit Plan is one of the most important business and financial decisions you must make. Dugan & Lopatka, CPAs can help you through the process and coordinate your advisor team (accountants, attorneys, financial planners, insurance agents, etc.) to save you time and money.
The Exit Planning Process
- Setting Exit Objectives
- Determining Value/Price
- Preserving, Protecting and Promoting Value
- Converting Business Value to Cash – Sale to Outside Party
- Transferring the Business for a Promissory Note
- Contingency Planning for Business
- Wealth Preservation Planning
Everyone exits their business sometime. Whether you leave it on your terms takes planning.
Are you ready to give the government nearly half of everything you own?
Estate planning is simply the planning process to ensure that the rewards of your years of hard work and saving are passed on to those beneficiaries you care about — be it your spouse, children, business partner, or charitable organizations.
Taxes are only part of the estate planning picture. Estate planning can be important from a business and/or family perspective, as well. How will your business be valued? How will you be succeeded or how will the business be disposed of? How will your spouse meet future financial needs? How do you provide for a financially spend-thrift child? Will your assets be used to meet your goals or will they be controlled by someone you don’t know?
Proper estate planning can provide solutions to anticipated problems and let you control the rewards of your hard work after your departure. Working with your attorney, and other professional advisors, we act as the point person to ensure the maximum benefits of estate planning at the lowest overall cost.
State & Local Tax Planning
We can assist you in complying with state and local tax laws.
In today’s economy, state and local governments are starved for revenues. As a result, state and local government taxing authorities are becoming increasingly aggressive in tax collection. Combine this aggressive environment with state and local tax laws and codes that can be obscure, complex and different across the states, counties and municipalities, and you have a perfect storm for business tax planning. Multi-state tax planning can be challenging and many companies overlook obligations or deductions and credits available to them.
Dugan & Lopatka will help you identify your multi-state tax activities and understand how those activities impact your multi-state tax obligations. Working with you, we will help you resolve issues and develop practical tax strategies to reduce your state and local tax costs.
Tax Credit & Deduction Opportunities
Real Estate Cost Segregation Services
Real estate cost segregation services: Valuable tax savings embedded in your commercial buildings!
We have discovered a new and legal way for you to receive secure, meaningful federal, state, and local tax savings – the acceleration of income tax depreciation deductions.
The IRS permits the acceleration of depreciation of some assets that traditionally would be embedded into the cost of buildings. In essence, they are allowing us to carve out shorter-lived assets (qualifying for 5,7, and 15 year write-off periods) that are normally embedded in a building’s construction or acquisition costs (generally depreciated over 39 years). To meet IRS acceptance rules, an engineering-based cost segregation study must be conducted and used to justify the accelerated depreciation.
A real estate cost segregation study is a federal income tax tool that increases your near-term cash flow by utilizing shorter recovery periods to accelerate the depreciation tax deduction on your investment in property. With the Tax Act reinstating 100% bonus depreciation, the potential cash flow increase is even greater. Learn more about cost segregation here.
We can work with you in “mining out” buried savings from:
- New buildings presently under construction.
- Existing buildings undergoing renovation, remodeling, restoration, or expansion.
- Prior purchases of existing property.
- Office/facility leasehold improvements and build outs.
- Post-1986 real estate construction, building acquisitions, or improvements where no cost segregation study was performed (even though the statute of limitations previously closed on the property construction/acquisition year).
Profit from the benefit of cash flow savings! For every million dollars of property you reclassify for faster depreciation write-offs, the present value of your increased cash flow from income tax savings approximates $230,000.
Example: Light Manufacturer acquired a facility four years ago for $6 million. Based on the cost segregation analysis, the engineers secured by Dugan & Lopatka determined that 30% of the building qualifies for short-life classification. By performing the cost segregation study, and filing required accounting method change documents, Dugan & Lopatka creates present value cash flow savings from tax reduction approximating $310,000!Research & Development Tax Credit
The Federal Research & Development Tax Credit: A possible tax relief gem!
If your company has spent time and resources to improve your product and make it better, faster and cheaper, then it’s likely that you have research and experimentation costs that qualify for the Federal Research and Development Tax Credit. The tax credit includes many more costs not typically captured in your accounting R&D Costs line.
Are you eligible?
If your company engages in product development or process improvement activities such as warehouse/distribution, manufacturing process innovation or software creation, you may be eligible. The government’s statutory rules dictate that credible research must be technological in nature, constitute a process of experimentation and intend to result in a new or improved business component. The rules are complex and no two businesses are the same. Eligibility will differ greatly. However, most companies will benefit from the following:
- A reduction in their current-year effective tax rate
- Cash refunds from previously filed income tax returns
- Identification of activities qualifying for other tax incentives
- Documented approach to identifying available credits that benefit future years.
How does Dugan & Lopatka uncover credits?
The secret to identifying your research and development tax credits is obtaining an in-depth knowledge of your processes. You frequently cannot capture available credits by relying only on accounting data. Companies typically spend more money in process improvement than product design. Although many companies do not design their products, they spend valuable resources improving the production process.
There is no easy way to capture process improvement expenditures. They’re buried in “manufacturing” accounts. By conducting thorough research and interviewing key personnel, Dugan & Lopatka’s R&D Tax Credit Team helps you uncover and identify these hidden expenditures.
Why Dugan & Lopatka?
Most CPA firms are generalists and do not have a thorough understanding of the government requirements for this tax credit. Likely your CPA firm didn’t even mention the R&D tax credit to you. We understand tax. We also understand the research & development tax credit rules.179D Energy Certification
179D energy certification: Commercial property owners and leaseholders can qualify for an energy efficiency tax deduction
Section 179D allows a deduction to a taxpayer who owns, or is a lessee of, a commercial building and installs property as part of the commercial building’s interior lighting systems, heating, cooling, ventilation, and hot water systems, or building envelope. Certification must be obtained to verify that the property installed satisfies the energy efficiency requirements of section 179D.” — Internal Revenue Service
Studies indicate that more than 80% of real estate owners miss out on energy deductions available on their qualified properties.
179D Potential Candidates:
- Upgrades, Renovations and Retrofits
- New Construction
- Private or Public Commercial
- Commercial Residential (4+ stories)
- LEED Certified Buildings
- Green/Energy-Efficient Buildings
- Types: Schools, Government, Office, Retail, Hospitality, Industrial, Manufacturing, Health Care, Parking Garages
- Architects, Engineers and Contractors
- Placed in service since January 1, 2006
What we do.
Together with our team of experienced engineers, we can help you assess past, current and future projects for tax benefits and guide you through the certification process so you can start taking advantage of valuable tax savings and increase cash flow for your business right away.