Justia Connect Webinars Five Steps To Tax Mastery for Law Firm Owners To Enhance Profitability

Five Steps To Tax Mastery for Law Firm Owners To Enhance Profitability

Join us for a comprehensive Continuing Legal Education (CLE) presentation tailored specifically for solo practitioners and small law firms seeking to optimize their tax strategies. In today's ever-evolving financial landscape, it's crucial for legal professionals to understand the intricacies of tax law and how to leverage it to their advantage.

This session will delve into practical techniques and actionable insights designed to minimize tax liabilities while maximizing returns. From navigating deductions and credits to strategic entity structuring and retirement planning, participants will gain valuable knowledge to ensure their firm's financial health.

Learning Objectives:

Understand the key tax deductions and credits available to legal professionals, and learn how to effectively leverage them to reduce taxable income for solo practitioners and small law firms.

Gain insight into the various entity structures available to legal firms and learn how to select the most advantageous structure for tax minimization purposes.

Explore retirement planning strategies tailored to the unique needs of legal professionals, including the utilization of retirement plans to reduce current taxable income and secure future financial stability.

Learn practical techniques for managing expenses effectively within a legal practice to maximize deductions and minimize tax liabilities.

Stay updated on recent tax law changes and their potential impact on solo practitioners and small law firms, enabling proactive adjustments to tax planning strategies for continued compliance and optimization.

Topics covered include:

Tax Law Law Firm Management Law Practice

Agenda:

Introduction
- About the speaker
- Polling questions for the audience
- Introduction to taxes for law firm owners
Business Owner Tax Strategies
- Statistics and introduction
- Employer retirement plans overview and features
- Business organization and payroll tax consequences
- Tax effects of employing family members
- Taxes and travel expenses
- End-of-year tax planning
- Contingency fee tax deferral
Personal Tax Strategies
- Overview of IRAs and HSAs (health savings accounts)
- Roth versus traditional IRAs
- Health savings accounts
- Roth conversions
- Backdoor Roth contributions
- Year-round tax planning
Taxes in Retirement
- The hidden IRA tax bomb
- The widow’s penalty
- Minimizing taxes in retirement
Summary, Review & Questions

Duration of this webinar: 60 minutes

Originally broadcast: October 10, 2024 10:00 AM PT

Webinar Highlights

This webinar is divided into section summaries, which you can scan for key points and then dive into the sections that interest you the most.

00:00 Introduction

Darren is introduced as a financial planning specialist for law firm owners, emphasizing his expertise and published work. Darren discusses tax mastery for law firm owners, focusing on minimizing tax liability and maximizing profitability. He outlines his firm's unique approach to financial planning, specifically tailored for law firm owners.

05:17 Tax Planning for Law Firms

Darren discusses tax planning, emphasizing its importance for law firm owners and the need for proactive strategies. He clarifies misconceptions about tax planning, noting that it involves year-round strategic thinking rather than just seasonal tax filing. Darren highlights the role of CPAs in tax planning and the importance of paying taxes at the lowest effective rate. He explains the progressive tax system and the concept of effective tax rate, urging law firm owners to assess their overall tax rate. Darren shares a statistic from Forbes, indicating that many small business owners overpay taxes, and emphasizes the need for strategic tax planning.

10:41 Retirement Plans and Tax Strategies

Darren explains the concept of tax deferral through retirement plans, highlighting various options like SEP IRA, Simple IRA, and 401(k). He describes the SEP IRA as a simple option for sole proprietors, noting its limitations when employees are involved. Darren compares Simple IRA and 401(k), emphasizing the flexibility and higher contribution limits of 401(k) plans. He introduces the solo 401(k) for solo practitioners, highlighting its advantages in terms of contribution limits and Roth options. Darren discusses the cash balance plan, a type of pension plan allowing larger income deferrals, beneficial for high-earning law firms.

22:05 Business Organization and Tax Reduction

Darren discusses the S Corp strategy for reducing self-employment taxes, explaining how it splits compensation into salary and distributions. He provides a comparison between sole proprietorship and S Corp taxation, illustrating potential tax savings. Darren notes that the strategy may not be beneficial in places with additional S Corp taxes. He addresses questions about IRAs, clarifying differences between employer plans and individual Roth or traditional IRAs. Darren emphasizes the importance of strategic business organization in minimizing tax liabilities.

27:46 Creative Tax Reduction Strategies

Darren explores creative tax reduction strategies, such as employing children and spouses for tax benefits. He suggests pairing business travel with vacations to make expenses tax-deductible, provided the trip has a primary business purpose. Darren discusses end-of-year tax strategies, like accelerating expenses and deferring income to manage tax liabilities. He introduces contingency fee deferral for attorneys, explaining how it can prevent high tax brackets from large settlements. Darren offers a free PDF of his book's tax section and encourages participants to engage with his resources for further learning.

38:14 Personal Tax Management and Roth Conversions

Darren explains the benefits of Roth conversions, emphasizing their role in achieving tax-free growth. He introduces the backdoor Roth IRA strategy for high earners, allowing non-deductible contributions to be converted to Roth IRAs. Darren discusses the potential advantages of C corporation status for high-income law firm owners, despite double taxation concerns. He suggests using donor-advised funds and charitable remainder trusts for strategic tax deductions. Darren highlights the importance of year-round tax planning, focusing on strategic income and expense management.

49:05 Q&A and Closing Remarks

Darren discusses the implications of IRAs as growing tax liabilities and the importance of Roth conversions to mitigate future tax burdens. He explains the widow's penalty, where surviving spouses face higher taxes due to changes in tax brackets. Darren outlines a strategy for achieving a tax-free retirement through Roth conversions and strategic account management. He offers resources and a free consultation to participants, encouraging them to explore his services further.

Please note this AI-generated summary provides a general overview of the webinar but may not capture all details, nuances, or the exact words of the speaker. For complete accuracy, please refer to the original webinar recording.

Continuing Legal Education (CLE) Credits

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California CLE

Status: Approved

Credits: 1.00 General

Earn Credit Until: June 30, 2026

South Carolina CLE

Status: Approved

Credits: 1.00 General

Difficulty: All Levels

Earn Credit Until: December 31, 2025

North Carolina CLE

Status: Approved

Credits: 1.00 General

Earn Credit Until: February 28, 2026

Texas CLE

Status: Approved

Credits: 1.00 General

Earn Credit Until: September 30, 2025

This presentation is approved for one hour of General CLE credit in California, South Carolina (all levels), and North Carolina. This course has been approved for Minimum Continuing Legal Education credit by the State Bar of Texas Committee on MCLE in the amount of 1.00 credit hours.

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At this time, Justia only offers CLE courses officially accredited in certain states. Lawyers may generate a generic attendance certificate to self-submit credit in their own jurisdiction, but Justia does not guarantee that lawyers will receive their desired CLE credit through the self-submission or reciprocity process.

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Speaker

Darren Wurz Chief Wealth Counsel
Wurz Financial Services

Darren Wurz is a highly regarded specialist in financial planning for law firm owners, and he is widely recognized as a published author and engaging public speaker. With his extensive experience as a financial planner, Darren partners with entrepreneurial law firm owners to turn their business success into extraordinary personal wealth and financial independence. He is the best-selling author of The Lawyer Millionaire: The Complete Guide for Attorneys on Maximizing Wealth, Minimizing Taxes, and Retiring with Confidence, a book published by the American Bar Association. Read More ›