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Taxation

Taxation Services

Spencer, Hager & Mosdell, P.C. is unique in the Roanoke Valley marketplace. We deliver large firm tax expertise in a local firm setting. Our partners work in an entrepreneurial manner to deliver value. We provide clients with deep technical tax consulting expertise and a wide range of tax services. By having direct access to partners and senior management, our clients receive customized solutions to their business needs. For more information on specific tax services, click on the page links below.

Here are just some of the specialized Tax Services available to Spencer, Hager & Mosdell, P.C. clients:

Tax Planning and Compliance

Today's tax environment is constantly changing, and effective business and tax planning allows clients to take advantage of significant economic opportunities and achieve substantial tax savings. Spencer, Hager & Mosdell, P.C.'s staff keep clients up-to-date of new legislation with innovative and knowledgeable answers on tax planning and compliance that can favorably impact tax consequences.

Our staff addresses client tax preparation and tax planning needs and provides a variety of specialized services. The majority of our tax services are rendered in the area of consulting and preparation. This means you can expect total involvement in your financial affairs and a prompt response to your tax planning needs. Tax return preparation and other compliance services are an essential part of the tax practice, and it's important that we have an in-depth understanding of your core business in order to know how to maximize your tax saving opportunities.

We have concentrated our efforts on working principally with corporate, partnership, and high-net-worth individuals. This allows us the opportunity to offer our business clients complete corporate and partnership services. In addition, it enables us to provide thorough, timely, and creative individual tax services for the principals of our corporate and partnership clients.

Estate and Gift Tax Planning and Compliance

Estate and gift tax planning can be one of the most complicated and misunderstood areas of the tax law. Let the Spencer, Hager & Mosdell, P.C.'s staff help you unravel that complexity by working hand-in-hand with you and your advisory team in developing and implementing comprehensive, personalized short-term and long-term strategies to reduce estate and gift tax, as well as preserving the wealth for your family.

We have extensive compliance and planning experience in working with high net worth individuals and their families, including:

Review of estate planning documents Consultations and assistance in implementing lifetime gifting strategies, including structuring of trusts, evaluation of generation-skipping transfer tax issues, multi-generational planning, and business succession planning. Assistance with philanthropic desires, including establishment, operation, and compliance for private foundations and public charities Education of future beneficiaries regarding wealth preservation across multiple generations Counseling of fiduciaries regarding administration of trusts Preparation of federal and state estate, gift, fiduciary, and exempt organization income tax returns Representation before the IRS and state taxing authorities

Entity Structuring Services

Choosing the most tax-efficient legal form for operating your business is critically important.

Your business structure must fit your short-term objectives and long-term business needs. As your business grows or your personal financial situation changes, the business form in which you operate may need to change, as well. Keep in mind that the business structure you choose will impact your personal liability, as well as the amount of federal, state and local taxes owed by the business entity and/or the equity holders. Larger business operations will have a variety of legal forms to maximize flexibility while minimizing overall taxes.

There is a variety of tax, financial, and legal implications associated with the legal formation of your operations and this should be evaluated annually to ensure your short-term and long-term objectives are being achieved.

Limited Liability Companies and Limited Liability Partnerships

The most commonly used legal structure for newly formed domestic entities involves Limited Liability Companies (LLCs) and Limited Liability Partnerships (LLPs) that generally offer limited liability and flow-through taxation. If your business will have multi-state or international activities, additional analysis will be required to ensure that tax withholding and other onerous tax reporting consequences are not triggered.

The structure of the LLCs and LLPs offers many legal advantages and is flexible for the equity owners and the operators of the entity. LLCs and LLPs can generally elect to be taxed as Partnerships (most common), C Corporations, or as "Disregarded Entities". Also, special allocations of debt, income, and losses (for those electing Partnership treatment), as well as investments in other entities, are not generally limited.

S Corporations

S corporations generally pay no federal income tax, and income and losses are passed through to shareholders. . The permissible number of shareholders is 100, and eligible members of the same family may be treated as a single shareholder. Estates, certain trusts, and tax-exempt organizations may also be shareholders.

S corporations avoid the double federal taxation inherent in C corporations, but they must follow strict rules. S corporations that were previously C corporations can trigger corporate-level tax in certain situations involving the sale of appreciated assets held at the date of conversion, or in cases where the S corporation has excessive investment or passive income.

C Corporations

C corporations are taxed as separate entities from their shareholders. The corporation pays taxes and the shareholder pays taxes again on any dividend payments - the so called "double taxation". Investors are taxed on the dividends they receive.

While C corporations are used infrequently for new entities, they can generally offer more tax-advantaged fringe benefits than S corporations and partnerships. However, C corporations may receive more IRS scrutiny. Salary paid to you and other shareholders must be reasonable, or a portion of it may be reclassified as a nondeductible dividend payment. If earnings are accumulated beyond the reasonable needs of the corporation, an additional tax of 15% will be imposed on these earnings.

In order to choose the optimal legal form for your business entity, careful analysis is required at the time of formation, and should factor in prjected start-up losses, furture income and potential exit possibilities.

Spencer, Hager & Mosdell, P.C. has decades of experience with these issues and can assist you in making the right decisions.