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Entity Management Services
A Value-Driven Proposition
Taxes are often one of the largest expenses businesses face, yet most people only think about them when it’s time to prepare their return. Proper tax planning can dramatically reduce this burden, allowing businesses to focus on growth rather than tax bills. For businesses who depend on well managed cash flow, valuable financial insights can help them prepare for the future and the unexpected. However, most businesses are flying blind and simply hoping for the best. They often have no clear understanding of their upcoming tax bill, how much they owe to creditors, what clients owe them, or even how much profit they’re making. This is simply a recipe for disaster and it doesn’t have to be this way.
Imagine saving $10,000, $20,000, $30,000, or more in taxes using strategies that are not only legal but encouraged by the Internal Revenue Code. What if the cost of implementing these strategies—also tax-deductible—was far less than your total tax savings? For most business owners, this would be an easy decision. After all, who wouldn’t want to save more than they spend? This approach not only maximizes your tax savings but also provides essential liability protection, minimizes audit risks, and enhances your business’s professional credibility.
What We Do
We specialize in implementing the use of legal entities to minimize tax impacts for our clients. The additional compliance requirements of S corporations can deter many sole proprietors from incorporating, which is why we handle everything. From S Corp formations, corporate compliance (annual reports and corporate minutes), professional bookkeeping services (preparing double entry financial statements), payroll processing, tax preparation and planning, and responding to all notices and correspondence with tax authorities, we do it all so you can focus on the thing you do best, running your business. As your business grows, you’ll find our fees to be a small investment compared to the substantial value we deliver through tax savings and financial insights. In that regard, our services literally pay for themselves. This is how we add value and why we always tell our clients that, “your success is our success!”
What Do You Get
As a sole proprietorship becomes more and more profitable, its tax bill can quickly be consumed by self-employment taxes. This is one of the major tax drawbacks of a sole proprietorship. Once a business has a net profit of $100,000 or so, the tax savings of an S corporation start to become very apparent. As the business continues to grow the tax savings become harder and harder to ignore.
But There’s More
Saving money on taxes is only one of the great advantages of an S corporation. Depending on your goals, the S corporation is a great vehicle for additional benefits not available to sole proprietors, including but not limited to:
- Reasonable Compensation/Salary – we will guide you to determine your reasonable salary requirement to maximize your benefits
- Retirement Plan Options – start saving for retirement and have your company make tax deductible contributions on your behalf with a SEP IRA or 401(k)
- Fringe Benefits – learn an exception in the tax code for deducting your health insurance premiums and other benefits
- Accountable Plans – reimburse yourself for the use of your home office or vehicle when used for business
- Tax-free distributions – take additional distributions from the company in addition to your salary tax-free to the extent of basis
Don’t believe us? We can prove it to you!
Take for instance two businesses, each with a net profit of $150,000. The first is a sole proprietor who will pay 15.3% FICA tax – commonly referred to as self-employment tax – on all of the taxable income from the business. The second is an S corporation, which will pay its owner/employee a reasonable salary of $50,000. The owner will pay half of the 15.3% in payroll taxes, a small FUTA tax, and personal income taxes on their salary. The company pays the other 7.65% in payroll taxes which can then be written off as a tax deduction. The remaining company profits can be taken as ‘distributions,’ which are not subject to self-employment taxes, resulting in significant tax savings. In our example the S corporation owner saves $10,169 more in Federal taxes than the sole proprietor on the very same net profit, all due to selecting a different entity and managing it effectively!
The example clearly illustrates the tax-saving advantages of an S corporation compared to a sole proprietorship with identical net profits. Many business owners don’t fully grasp just how much they are paying in taxes. When evaluating your tax professional’s value, it’s crucial to consider not just their fees, but also your total tax burden. The savings we demonstrate here are undeniable. The Internal Revenue Code provides substantial incentives for entrepreneurs to start and grow their businesses, and it’s crucial to take full advantage of these opportunities. These scenarios merely scratch the surface of what’s possible. Imagine what these savings could mean for your business and your life—whether it’s investing in long-needed equipment, taking that dream vacation, or covering college tuition. Our strategies are designed to help you achieve your financial goals faster and more effectively.
While S corporation may not be the right entity choice for everyone, please contact us today and we can perform a comprehensive analysis to see if it is the right entity choice for you. We will literally prove it to you and you will see unequivocally how our services can bring you the added value to not only save you money, but help you succeed. What are you waiting for?
Entity Management Services
We will build you a customized quote to manage your S Corporation, compliance, payroll, tax, and bookkeeping effectively. Contact us today to analyze your current situation. Let’s explore how our tailored entity management services can help you maximize savings and achieve your financial goals.