Business Tax Quarterly Executive Summary - Spring 2019

Leveraging certain classifications in business transactions can yield tremendous tax savings. For C corporations, the designation of a personal goodwill claim can sidestep double taxation in a traditional corporate sale. More broadly, businesses of all types can avoid payroll taxes by hiring workers as independent contractors.

Yet these classifications can’t simply rely on contract details to withstand state and federal scrutiny. The substance test must be met. As recent headlines confirm, companies face steadily increasing litigation as workers claim misclassification. Meanwhile, the rise in M&A activity is sparking corporate reflection on the best exit strategy. Personal goodwill remains largely overlooked as a tax law issue and holds significant savings potential for C corporations, but requires the company to make a strong case for its application. 

Whether companies are seeking to sell the business or hire new workers, it’s critical they understand the criteria for meeting certain tax-advantaged classifications. Learn the essential questions to ask and know the main benchmarks before proceeding with (or discontinuing) any classification.

Business Tax Quarterly - Spring 2019

• Business Tax Quarterly Executive Summary - Spring 2019
• 3 Ways to Determine ‘Contractor vs. Employee’ Classification
• 4 Questions to Assess ‘Personal Goodwill’ in a C Corporation Asset Sale
• Business Tax Quarterly Suggested Readings - Spring 2019