Employee retention is crucial and can improve when employer's profit share, but there are costly mistakes to avoid both for legal and tax purposes. Jasmine DiLucci, JD, CPA, EA, and Lynnsee Starr, JD, talk about when it makes sense to profit share with employees and how you can mitigate potential negative consequences.
Welcome to Tax Leverage, where we talk about the tax laws that you can leverage in business. The information on this podcast is for educational purposes only and does not constitute professional legal or tax advice.
Chapters
(00:00:00) - Introduction
(00:00:10) - Why Employers Profit Share
(00:02:25) - Two Most Common Options for Profit Sharing
(00:03:20) - The Biggest Mistake to Avoid When Profit Sharing
(00:08:59) - How to Mitigate the Risk of Adding an Employee to Ownership
(00:11:43) - Tax Impact of Adding Employees to Ownership
Tax Leverage