Ask a CPA

As part of a divorce settlement decree or a legally separately decree of separate maintenance, the transfer of a traditional IRA to you is considered a tax-free transfer and not reportable or taxable.

The account balance of all your husband's IRA's at the time of death is included in the gross estate.

A limited liability company, like a corporation, is set up and created under state law. Its owners are referred to as members. The entity gives its members the best of both worlds - Corporate liability protection with the advantages of partnership taxation. Forming a limited liability company is more expensive than forming a corporation and may not be necessary for your situation. Speak to your local CPA in detail to determine if forming or changing your entity status to a limited liability company is the correct choice for you.

Some advantages are: it has minimum legal restrictions; and is easy to discontinue. Some disadvantages are: unlimited liability; your income tax cannot be deferred by retaining profits; and you may not bring in new owners or outside capital contributions. Speak to your local CPA to determine the best entity choice for your needs.

Some advantages are: there is limited liability; and the entity avoids double taxation of profits as is the case with C Corporations.
The profits that are passed through to the shareholders are not subject to SE tax as in a partnership.
Some disadvantages are: that the shareholders pay tax on earnings even if they are undistributed; the contributions limits to a qualified retirement plan are based on shareholder/employee wages, not the overall profits as with a Sole Proprietorship.

An advantage is that it is a way to combine the financial abilities and skills of several different people. Some disadvantages are that the general partners are liable for the actions of the other partners and a partnership is not that easy to get out of. Speak to your local CPA about selecting the best entity for your purposes.

Some advantages are that it avoids certain S corporation restrictions. It also avoids double taxation of profits.
Some disadvantages are that it is currently considered a relatively new business entity with little case law or regulatory law currently available.
There is inconsistent treatment from state to state. The entity must have at least 2 owners.
Speak to your local CPA about determining the best entity choice to fit your needs

Some advantages are: you have limited liability; there are easy ways to transfer ownership; there is a perpetual life and the corporation has the ability to raise capital through the issuance of stock. Some disadvantages include: there is a double taxation of profits; the entity is subject to various state and federal restrictions; and a corporate charter may restrict the types of business activities. Speak to your local CPA to determine the best entity choice to fit your needs.

Simply stated, a S Corporation is taxed in the same manner as a partnership and is not taxed at the federal level. The income or losses and expenses flow through to the shareholders. A "C" Corporation pays tax on its profits, and if the owner shareholders take profits from the corporation, the distributions take the form of taxable dividends. In effect, this is a double taxation of profits. There are advantages and disadvantages to both S Corporations and Regular C Corporations. Speak to your local CPA about the tax strategies of selecting the type of entity for your business.

The wage base for determining the maximum amount of income subject to social security taxes will be $110,100 for the year 2012.
Maximum 2012 employee Social Security Liability is $4624.20. .042%
For the years 2009 through 2011, the maximum wage base was set at $106,800.