Consulting businesses are highly unique, in that the income generated is primarily based upon the Principal’s time, and the expenses are limited to support staff, rent, and cost of running the business. As a result, there is a unique need to focus on the business operations and costs, not just the tax implications. While the tax return will reflect the previous year’s expense levels, our advice and consulting can help you bring those costs down. Our network of clients and business associates can help you year round, not just during tax season. To help our business owners, we host Bette’s Business Book Club, where Bette hosts a discussion on zoom about a business book. You can join in the discussion, or just listen to the insights from fellow business owners and financial professionals.
Corporate Veils, Why They Matter
The Corporate Veil in both corporations and limited liability companies is what separates you from your business entity financially and legally. That is what the limited liability stands for in LLC, and is the large reason for forming a corporate entity or LLC. However, if you co-mingle the assets between your organization and your personal finances, or between two or more of your organizations, you can lose that protection, called “piercing the corporate veil.” The act of defending your corporate veil falls to your lawyer in a court of law, but the primary determination of the legitimacy of your corporate veil stems from your accounting and operational behaviors.
We have experience with Corporate Accounting, Partnership Accounting, multiple level LLC structures, and all the various iterations that can cause business owners to get tripped up. By engaging in regular reviews of your finances, and identifying and fixing problems quickly, we can help you protect your corporate veil from attack and help you protect your business assets.
Tax Issues with Clients in Multiple States
Originally created to tax professional athletes by rival teams, most states with an income tax will tax non-residents that earn money in that state. If you travel to multiple states to conduct business, depending on the states involved, you may need to track sales and expenses by state. Setting up your systems early and your receipt tracking system will help us maximize your deductions and minimize your tax bill.
Your Car as a Business Expense
Every service business expects to write-off their transportation as a business expense, and often has a rude awakening when they are not able to. It is entirely possible to write off the cost of your vehicle and much of the maintenance of it, but only with proper record keeping. With modern smartphones and data systems, this can take only a few minutes a day, and may make the difference of thousands of dollars come tax time. Using a neighborhood tax accountant that just reviews your receipts may save you a few dollars in accounting costs, but lose thousands of dollars in deductions by not setting up systems ahead of time. We’ll work with you to maximize your deductions and get as many of your automotive expenses to be work related as legally permitted.
Putting your Spouse on Payroll
For single income families with a primarily non-working spouse, putting the spouse on payroll can be a critical financial planning tool. While this only applies when the spouse actually works in the business, few entrepreneurs don’t have their spouse come in and help, whether it is with the billing late at night, or helping with office work as needed. By working with you to document your spousal involvement and setup payroll, we can increase your ability to defer taxes in retirement accounts, plus receive additional dependent care and other tax credits. Many tax credits only apply if both spouses work, and the IRS defines work as receiving a W-2, so properly setting up spousal payroll is important for family business owners.