Small Business Tax
Your accountant files your return. Nobody is planning it.
By the time your return is prepared in March, almost every decision that could have lowered the bill was made months earlier. Tax planning happens while you can still change the outcome. That is the work we do.
- CPA led
- Planning, not just filing
- Entity, payroll & bookkeeping under one roof
- Remote, nationwide
Preparation is history. Planning is a decision.
Tax preparation is the act of reporting what already happened. It is necessary, it has a deadline, and by the time it starts your options are largely gone. If your only contact with your accountant is handing over documents in the spring, you are buying compliance and nothing else.
Tax planning is the work done during the year, while there is still time to change the answer. What entity you operate through, how you pay yourself, when you buy equipment, what retirement structure you use, how you treat a vehicle or a home office, whether you accelerate or defer income into a particular year. Each of those is a decision with a tax consequence, and each has a window that closes.
Most small business owners we meet are not being poorly served. They are being differently served than they assume. They believe they hired an advisor and they actually hired a filer.
Where the money usually is
These are the areas where we most often find real savings for owner-operated businesses. Which apply to you depends entirely on your numbers, and any honest answer starts with looking at them.
Entity structure and S corporation election
For a profitable owner-operated business, electing S corporation treatment can reduce self-employment tax on the portion of profit taken as distribution rather than salary. The savings are real, but they only make sense above a certain profit level and they come with payroll and filing obligations. It is worth modeling rather than guessing.
Reasonable compensation
If you run an S corporation, the salary you pay yourself is one of the most scrutinized numbers on your return. The IRS has explicitly rejected percentage rules of thumb. Compensation has to reflect what the role would command, and the analysis supporting it belongs in your file before anyone asks for it.
Retirement structure
A solo 401(k), SEP, or in the right circumstances a defined benefit plan can shelter far more than most owners realize. This is frequently the single largest lever available to a profitable small business, and it is almost always underused.
Timing of income and expense
Whether to accelerate a purchase, defer an invoice, or spread a large item across years. Small decisions individually, but on a lumpy year they can move the number meaningfully, and they all expire on December 31.
Accountable plans and owner expenses
Home office, vehicle, travel, and equipment reimbursed properly through a documented accountable plan rather than claimed loosely. Same economics, materially better audit position.
The deductions you are simply missing
Not aggressive positions. Ordinary and necessary business expenses that never made it into the books because nobody was tracking them during the year. This is the least exciting item on this list and often the most valuable.
Why this only works with real bookkeeping
This is the part most firms leave unsaid, so we will say it plainly.
You cannot plan from a shoebox
Planning in October requires knowing what your year actually looks like in October. If the books are reconstructed in February, there is nothing to plan with while it still matters.
Current books, all year
Monthly bookkeeping is not an upsell attached to tax work. It is the instrument panel that makes planning possible. Without it, every conversation is retrospective.
Decisions with numbers attached
Should you buy the vehicle this year? Take the S corp election now or in January? Increase your salary? Each has a defensible answer once the books are current, and only guesswork before that.
What we do for small businesses
Tax planning
Ongoing planning during the year, with a mid-year and a year-end review, so decisions get made while the window is open.
Business and personal tax returns
Federal and state returns for the entity and for the owners, prepared together so the two are actually coordinated.
Entity selection and formation
Choosing and forming the right structure, and making the S corporation election when the numbers justify it.
Reasonable compensation analysis
A documented, defensible salary determination for S corporation owners, kept on file before it is ever questioned.
Monthly bookkeeping
Books kept current in QuickBooks so you can see the year while you can still act on it.
Payroll
Owner and employee payroll set up and run correctly, which is a prerequisite for the S corporation strategy to work at all.
Quarterly estimates
Estimates calculated from real numbers rather than last year’s, so you are neither penalized nor lending the government money.
IRS and state notices
We handle the correspondence. As a CPA-led firm we can represent you before the IRS directly.
Retirement plan strategy
Selecting and implementing the plan structure that matches your profit level and your goals, coordinated with the rest of the plan.
How we work
A look at your last return
We start by reading what was actually filed. It usually tells us within twenty minutes whether there is meaningful opportunity, and we will tell you honestly if there is not.
Get the books current
If they are not current, this comes first. Everything else depends on it.
Build the plan
Entity, compensation, retirement, and timing, modeled with your numbers so you can see what each decision is worth before you make it.
Implement it properly
Elections filed on time, payroll set up correctly, documentation created contemporaneously. A strategy that is not implemented properly is not a strategy.
Review during the year
Mid-year and year-end check-ins, because businesses change and a plan built in January can be wrong by September.
Questions
Frequently asked
Should I elect S corporation status?
It depends primarily on your profit, and secondarily on your willingness to run payroll and file an additional return. Savings generally become meaningful once profit comfortably exceeds the salary you would reasonably pay yourself, often somewhere north of roughly $75,000 to $100,000, but the honest answer requires your actual numbers. We model it rather than apply a rule of thumb.
What salary do I have to pay myself in an S corporation?
Reasonable compensation for the work you actually perform. The IRS has rejected percentage formulas such as a fixed sixty-forty split. The defensible approach is to determine what someone would be paid to do your job, document how you arrived at it, and keep that analysis with your records.
Is it too late to save money on last year?
Usually most of it, though not always. Retirement contributions and certain elections can still be available after year end, and an amended return is sometimes worthwhile. The larger point is to stop repeating the pattern; the next year is still fully open.
Do I really need monthly bookkeeping?
If you want planning rather than filing, yes. We are not going to pretend otherwise to make the engagement easier to sell. Planning requires current numbers, and current numbers require someone keeping them.
How much do you charge?
It depends on entity type, transaction volume, and how much cleanup is needed up front. We will quote a fixed fee after looking at your last return and your books, so you are not on an open-ended hourly meter.
Do you work with businesses outside your state?
Yes. We work remotely with clients nationwide, and we handle multi-state filing where your business has that exposure.
Do I have to be a government contractor?
No. Government contract accounting is a specialty of ours, but a large share of our clients are ordinary small businesses with no federal work at all.
Start with a look at your last return
Send us your most recent business return. We will tell you what we see and whether there is enough opportunity to justify working together. No obligation either way.
General information only, not tax advice for your specific situation. Any strategy discussed here depends on your particular facts and should be evaluated before it is relied on.