George Freeman (age 46) is the owner of a tool and die company, GMED Manufacturing Inc., (GMED), and is married to Laura Freeman (age 46) who is a self-employed graphic designer. They have four children: Jordan (age 7), Colin (age 5), Cate (age 3), and Caroline (age 1). George and Laura have been married for 11 years. Georges salary is $235,000. Their net worth is approximately $1.9 million at this time; of which $1.0 million is the value of his business, GMED. Laura has an office but primarily works from home so that she can also take care of the children. She has no employees and has a Schedule C net income of $100,000 per year.

Their Goals & Concerns 1. They want to provide for their childrens college education (4 years each) expected to cost $25,000 per year in todays dollars. 2. They want to save for weddings for each of their three daughters. They expect the weddings will cost $40,000 each in todays dollars and want to plan that each child will marry at age 23. They believe wedding costs are subject to general inflation. 3. They want to retire debt-free when they are age 62 (when they both plan to retire). 4. They initially define adequate retirement income as 80% of preretirement income. 5. They want to have adequate risk management coverage. 6. In case of his death, George is primarily concerned with providing income for Laura for the duration of her life and secondarily, leaving the remainder of his estate to their children. 7. George and Laura have mutually agreed to buy Colin a Porsche or give him the equivalent amount of money as they pay for the girls weddings at his age 23. They have not yet told Colin. 8. They want to have an appropriate investment portfolio. 9. They want to have an appropriate estate plan.

According to the information given above, how taxes are handled and what is the recommendation.