Consultants and Consulting Firms
Premier CPA Services for Consultants: Partnering with Thought Leaders and Industry Experts
Consulting firms mainly earn from the time and expertise of their main leaders. Their main costs are things like staff salaries, office rent, and daily business expenses. This means it’s important to look closely at how the business runs and its costs, not just taxes. Even though the yearly tax return shows last year’s costs, our advice can help lower these expenses. Our group of clients and partners can help you all year, not just when it’s time for taxes.
Corporate Veils
Why They Matter
The Corporate Veil in corporations and LLCs is what keeps your personal and business finances separate, both legally and financially. It’s the main reason people form corporations or LLCs. But if you mix personal and business money, or mix funds from different businesses you own, you could lose this protection. This is known as “piercing the corporate veil.” If someone challenges this in court, a lawyer will defend it. But how strong your defense is depends on how you handle your business finances and operations. Your CPA should help you keep records right and set up processes to prevent issues.
We know about Corporate and Partnership Accounting, different LLC setups, and other areas that can confuse business owners. By regularly checking your finances and quickly fixing any issues, we can help keep your business safe and its finances separate.
Consulting Business Tax Issues
Expert CPA Firms Know Your Issues
Consulting businesses might look simple: you offer your time and get paid, often shown in a 1099 Form. But things get tricky with changes in the Meals Deduction, how you charge clients for costs, and making sure you file a 1099 for any contractors you hire. In our education area, we have a video on “How to Fill out 1099 Misc Forms.”
Expense your Car?
Rules for Cars as a Business Expense
Every service business hopes to count their transportation as a business cost, but many are surprised when they can’t. You can deduct vehicle costs and its upkeep, but you need the right records. Nowadays, with smartphones and apps, this can be done in minutes daily and can save you a lot of money during tax season. Choosing a local tax accountant who only checks your receipts might save some money upfront, but without proper systems, you could miss out on big deductions. We’ll help you claim the most car-related expenses legally possible.
Work in Multiple States?
Multiple State Tax Issues Need Expertise
If you do business in multiple states, you might be taxed by states other than where you live. This idea started with taxing pro athletes from other teams. If you’re traveling across states for business, you might need to keep track of sales and costs by state. By organizing your accounting and keeping track of receipts, we can help you get the most deductions and lower your tax bill.
Spousal Payroll?
Double Your Tax-Free Benefits
For families with one primary earner and a non-working spouse, adding the spouse to the payroll can be a key financial strategy when the spouse contributes to the business. Many business owners often have their spouses assist with tasks like managing billing or other office tasks as needed.
By working with you to accurately document your spouse’s involvement and set up payroll, we can help you optimize tax deferrals in retirement accounts and access additional tax credits. Proper documentation is crucial to meet IRS regulations; they have strict rules and a specific section for Married Couples in Business.
Keep in mind, several tax credits are only available if both spouses are employed, as defined by receiving a W-2 by the IRS. Therefore, proper spousal payroll setup is essential for family businesses to access these benefits.
Evaluating Consulting Business CPA Firms
Are We Compatible?
Make sure you choose a CPA firm led by professionals who comprehend the necessities of business owners, not just the intricacies of business tax returns. It’s imperative to view the owner’s finances comprehensively when providing advice on tax matters, retirement plans, and other pivotal financial decisions. You’ll gain from proficiency in tailoring your chart of accounts to suit your consulting business’s specific needs. By managing your expenses effectively, you can optimize your business operations and monitor your financial flow in real time. Similar to how you aid your clients in making informed decisions, we are here to assist you in the same way.
Consultants CPA – More Info
Time Sensitivity
I know how busy professional life can be, especially when every hour counts. My goal is to save you time, allowing you to focus on your clients, while my team and I take care of your needs.
Intelligence
The initial work is handled by our capable junior staff to maintain cost-effectiveness, but I personally oversee all high-level discussions. With an engineering background from MIT and a Master’s Degree in Accounting, I’m well-equipped to understand and respond to your needs efficiently.
Firm Structure
Small CPA and consulting firms operate similarly. We manage payroll for our team, establish benefit packages, and implement retirement plans accommodating varying income levels, all while maintaining a structure that’s easy to navigate.
CPA Services for Consultants & Consulting Firms FAQs
What does a CPA firm do for consulting businesses?
We handle entity setup, bookkeeping and monthly close, invoicing workflows, expense policies, payroll, contractor compliance (1099s), state tax filings, quarterly tax estimates, and year-end returns—plus proactive tax planning to keep more of what you earn.
Which entity should a consultant choose—LLC, S-Corp, or C-Corp?
It depends on liability, income level, and how you pay yourself. Many solo consultants start as an LLC and elect S-Corp when profits justify payroll + distributions. We model tax savings vs. admin costs and coordinate with your attorney.
How do I protect the corporate veil for my consulting LLC or corporation?
Keep separate bank/credit accounts, use formal contracts, document owner decisions, avoid commingling funds, and pay yourself properly. We set up controls and monthly checklists so your records support limited liability.
Are home office, internet, and software subscriptions deductible?
Usually yes when ordinary and necessary for your business. We implement an accountable plan and chart of accounts so expenses are captured correctly and audit-ready.
Can I deduct my car for consulting work?
Yes, either standard mileage or actual expenses. The key is a contemporaneous mileage log. We help you pick a method, set up an app, and avoid double counting fuel, lease, or depreciation.
What are the current rules for meals and travel?
Business travel is generally deductible; client meals are typically 50% when properly documented (who, what, when, where, business purpose). We standardize your receipt capture and coding to pass an audit test.
Should I add my spouse to payroll?
If they perform bona fide work, W-2 wages can unlock retirement plan contributions and certain credits. We document duties, time, and pay to satisfy IRS rules and design a tax-efficient compensation package.
Do I need to issue 1099s to my subcontractors?
Yes, when you pay eligible vendors for services. We collect W-9s up front, track payments, and file 1099-NEC electronically so you avoid penalties and state mismatches.
What’s better for a consultant—SEP-IRA, Solo 401(k), or a cash balance plan?
It depends on profit level and whether you have employees. Solo 401(k) often allows higher contributions at lower income; cash balance plans can supercharge savings for high earners. We design and administer the right plan.
How do quarterly estimated taxes work for consultants?
Because 1099 income has no withholding, you typically pay four estimated installments a year. We forecast income, set aside safe-harbor amounts, and automate payments so you avoid underpayment penalties.
I work in multiple states—do I owe tax in each one?
Possibly. Economic and payroll nexus rules can trigger filings where you travel or have clients. We review your calendar, receipts, and contracts, then register and file in required states only.
Are consulting services subject to sales tax?
It’s state-specific. Some states tax certain professional services. We evaluate nexus and service type, then configure your invoices and registrations to comply where needed.
How should I bill clients for reimbursable expenses?
Use a clear policy: either bill as income (with offsetting expense) or as an accountable reimbursement. We pick a method, set GL codes, and ensure your invoices and 1099 reporting align.
What KPIs should a consulting firm track?
Utilization rate, effective hourly rate, average project margin, AR days, win rate, and overhead as a % of revenue. We build dashboards so you can price confidently and scale profitably.
When does it make sense to elect S-Corp status?
When net profit consistently exceeds what a reasonable salary would be for your role. S-Corp can cut self-employment tax on distributions—if payroll is done right. We run the breakeven analysis and handle compliance.
How do you price your CPA services for consultants?
Transparent, fixed-fee packages based on complexity: bookkeeping and close, payroll/1099s, state filings, tax planning, and returns. Add-ons for multi-state, retirement plan admin, and fractional controller support.
Can you clean up messy books from prior years?
Absolutely. We reconstruct transactions, separate personal/business, fix sales tax and 1099 gaps, prepare workpapers, and file any amended returns needed—then put monthly processes in place so it stays clean.
How do we get started?
Book a consult and share your bank/credit feeds, prior returns, invoices/contracts, and a simple expense export. We deliver a 90-day cleanup and tax plan with clear timelines and a fixed price.
