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Tax Services

Optimizing Taxes, Maximizing Ownership

ESOPs offer substantial tax benefits to business owners and their companies. Essentially, ESOPs are supplemental employee benefit plans that provide flexible exit planning strategies for business owners where the seller obtains favorable tax treatment on sale, the company receives tax-advantaged financing, and employees acquire valuable retirement benefits. However, today's tax laws are complicated, and it is too easy to overlook deductions and credits to which your company is entitled. Berman Hopkins provides the support, objectivity, and expertise businesses need to succeed within an ever-changing business landscape. We focus on delivering relevant, timely, cost-effective taxation services that improve operations and strengthen internal controls.

 

We will also take into account many items that could be beneficial to you, including but not limited to the following:

  • Ensure tax minimization strategies are explored and implemented promptly through regular meetings with your finance team.

  • Consult with management throughout the year to ensure the proper treatment of transaction items, including the annual year-end financial and tax physical.

  • Emphasize optimal tax minimization strategies for federal, state, and local taxes while meeting compliance obligations.

  • Optimize future investments and exit strategies with a proper tax and business structure.

  • Take into account a volatile tax landscape with long-term tax planning.

  • Determine research and development credits, including Employee Retention Credits.

  • Research cost-segregation tax benefits.

  • Consider accelerated depreciation, including Section 179.

  • Look at outside services or subcontractors, including worker classification.

  • Identify potential tax implications of shareholder loans and IRS risks to ensure proper documentation.

Advantages

  • Capital gain on the sale of shares of a C-Corporation to an ESOP may be deferred by the selling owner as long as, among other requirements, the ESOP owns 30 percent or more of the corporation’s shares after the transaction and the selling owner invests the sale proceeds in the qualified replacement property.

  • The percentage of profits of an S-Corporation owned by an ESOP is not subject to federal (and possibly state) income tax because ESOPs are income tax exempt.

  • Contributions by the company to the ESOP (including contributions used by the ESOP to pay principal and interest on a loan) are considered contributions to a tax-qualified employee benefit plan and are tax deductible within certain limits.

  • Dividends paid on stock held by the ESOP are tax-deductible to a C-Corporation (but not an S-Corporation) if distributed to ESOP participants or are used to pay principal and interest on a loan.

  • There are estate and charitable gifting planning opportunities for the selling owner.

  • Employees receive tax-deferred retirement benefits, eligible for tax-free rollover upon distribution from the ESOP.

When we say experts, we mean experts.

Below is a list of accredited affiliations and associations our audit team work with on a regular basis.

AICPA-Employee Benefit Plan Audit Quality Center
Florida Insitute of Certified Public Accountants
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National Association of Certified Valuators and Analysts
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"Our leadership team appreciate Berman Hopkin’s advisors as we went through the formation of our ESOP given their solid ESOP knowledge and their customized approach to our specific needs as a company.” 

 Michael Rodriguez
E-Z Bel Construction LLC

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