How a Tax Lawyer Can Benefit Your New Jersey Business

An experienced New Jersey tax lawyer can help ensure you’re up to date with the law

By Benjy Schirm, J.D. | Reviewed by Canaan Suitt, J.D. | Last updated on January 31, 2024 Featuring practical insights from contributing attorney Jason D. Navarino

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If you own a business, you pay taxes. And if you haven’t consulted with a tax attorney to create a plan for how to deal with the Internal Revenue Service (IRS) for federal taxes or the New Jersey Division of Taxation for state taxes, you are doing a disservice to yourself and your business.

Every business owner “definitely needs to think about compliance often and early,” says attorney Jason Navarino.

Business Tax Issues Are Complex and Ever-Changing

It doesn’t do much good to only call your tax attorney the week your taxes are due, nor does it make good business sense to do so, especially because the tax laws change at an alarming rate. Every few years, tax codes change, creating new legal issues to be aware of.

“[While some] business owners see a reduction in their overall taxes, others… will find that the rules are more complicated than they have been in the past. Particularly, the international sections of the code are much more complex.”

Another example of how tax law impacts business decisions is in the realm of mergers and acquisitions. Navarino says he’s seeing more M&A deals these days, driven in part by changes to the tax code. “Tax reforms [have meant that] a lot of companies now have more money to invest in their businesses, and owners that are looking to make an exit from their business may get out more cheaply than they have in the past.”

[Every business owner] definitely needs to think about [tax law] compliance often and early.

Jason D. Navarino

Caution in Making Structural Changes Due to Changed Tax Policies

He does, however, warn taxpayer clients to be careful about making structural changes due to the tax reform.

“For example, because the corporate rate came down so low, a lot of limited liability company (LLC) clients think they should switch to a corporation,” Navarino says. “There are a lot of short-term tax savings to be had from doing that, but I tell people: ‘Think about the long term, because, although it’s generally not a taxable transaction to switch from an LLC to a corporation for tax purposes, going the other way is a taxable transaction. And the costs usually do not exceed the benefits. You may save the money for a few years, but if there’s a change in Washington, and the corporate rates go back up, getting out of that LLC structure could be completely unaffordable.’”

Further, if a client is looking to get out of business in the next couple of years, and the tax reforms won’t affect them, it may make more sense to make the move. However, says Navarino, “if you’re hanging onto the business for 10, 15, 20 years to come, perhaps these drastic short-term tax benefits should be considered more cautiously.”

Find a New Jersey Tax Attorney with Extensive Experience

While the very phrase “tax day” can cause business owners to roll their eyes, with the proper tax planning and compliance, dealing with the event may go smoother than they think.

Visit the Super Lawyers directory to find an experienced and reputable tax attorney in your area for legal advice. For more general information on this practice area, see our tax law overview.

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