Should Your Incorporate Your New Business or Convert Your LLC to an S Corporation for tax purposes

Recently I received an inquiry from my website which is listed below:

I found your website...love the Christian approach. I'm in need of a Profit and Loss statement from a CPA quickly for a loan modification I've applied for. I am a Realtor...and have some minor expenses from my commission checks. I can drum up receipts for the desk fee and website fee, but the rest is minor for gas (lunches with prospects) and one rebate I have not gotten a cashed check back for. They don't add up to much, and would almost be willing to take them out if you would have to have receipts to prepare?

I need this very quickly or we might lose our loan mod. Any help you can give me would be greatly appreciated.

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Utilization of Promissory Notes to Protect Your Georgia Based Business & Beyond

Recently I received the below inquiry seeking advice on setting up a Promissory Note:

Is there a "normal or required" period that a Loan To Shareholder needs to be repaid?  

The below is my response:

The "normal amount" would be what a bank would routinely do as a practical matter of doing business. With all loans you will want to ensure that you have a promissory note signed by all parties confirming the terms and conditions. Frequently businesses and individuals alike may extend, grant or receive credit in the furtherance of their business and personal interests. A basic understanding of promissory notes and their use and application are critical to protecting company assets, cash flow issues, as well as profit maximization. These initial parameters of review prior to signing a promissory note will be essential to their final agreement. These issues will be key to helping ensure the business deal you get is actually the one intended. To read more about Promissory Notes visit http://www.hiscpa.com/promissory-notes.html

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Setting up an Installment Plan with the IRS and Recording of 2009 Internal Data and Bookkeeping Issues

Attached is a recent note we received from a potential client However, extreme caution should be exercised by taxpayers to ensure that they retain the services of a CPA who is experienced with tax representation issues and matters.

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Gwinnett Christian Business Men's Group

Our Christian Business Men's Group will not meet the week of Thanksgiving. I pray that during the rush of the holidays that God finds you still and that you let He, His heart, and His Passion for your Life be revealed.

It is in living in obedience to God that we can best find His will for our lives and Our Destiny.

Our group will continue meeting weekly the Tuesday after Thanksgiving.

Below is the initial announcement about our group. Please share it with others both to strengthen others and to reach out to a lost world.

In the Matchless Name of Christ,
John Dillard CPA

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Metro Atlanta CPA Advises on Taking Your Christian Business Into the World: WWJD

"But his delight is in the law of the LORD, and on his law he meditates day and night." Psalm 1:2

Below is a recent inquiry I received off of our web site. I share it to encourage you to take Jesus along with your to work and indeed everywhere you go.

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Converting Your C Corporation or LLC to an S Corporation for Tax Purposes

With changes over the last ten plus years in state law, more and more Georgia based businesses are incorporating as an LLC because of the ease of the initial set up of the business entity. However, frequently this may not be the best "tax choice" for the business as an LLC pays FICA and Medicaid taxes on all of its net earnings out of the business, whereas an active S Corporation owner will pay FICA and Medicaid taxes on its W-2. Tax law does require, however, that all S Corporation owners are to take a fair and reasonable salary given position and profit. Though the election is not in the best interest for all business's as many LLC's should stay an LLC for both legal and tax purposes, becoming an S Corporation is often a prudent decision for the following types of business:

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Using Life Insurance with Estate Planning  

Even with reduced estate tax rates and higher exclusion levels, Americans could still be on the hook for billions of dollars in estate taxes over the coming years. More than half a million estate tax returns were projected to be filed with the IRS in calendar years 2004 to 2010.1  

Fortunately, there are strategies to help protect the legacy you intend to leave your heirs. One popular method uses life insurance to complement your estate plan and possible help offset your estate tax liability.2  

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Determining if You Should Start Your Own New Business

For many who are out of work and have been unemployed for some time, it make be the ideal time to start a new business as your opportunity costs of pursuing other ventures is small to non-existent as you have no present income to lose. Many who desire to start a new business have to think long and hard about forgoing their job and quitting their present employment before looking to start a new business venture. However it was at such a time that my own CPA practice was formed, for it is often when God finds us at our weakest that He can use us to accomplish His ultimate will for our lives. Recently I had a call from a Believer in Texas who was facing such difficulty and we discussed such issues to which I forwarded the below response:

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Feeding the Homeless on Thanksgiving Day 2009...Taking Christianity Into the World

My wife and I were blessed to be able to serve at 7 Bridges to Recovery where we met Pastor 7 and his men! This Thanksgiving in 2009, we will be serving the homeless men and women of Atlanta as we bring a Thanksgiving feast and God's word to many people living under the bridges of the streets of Atlanta and some canned goods to the shelter. We will also be collecting jackets and sleeping bags to help keep those who cannot do for themselves warm this upcoming winter.

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Penalty and Tax Assessment Relief Taught by Metro Atlanta CPA

Several weeks ago we were approached by a taxpayer for those the IRS had assessed almost $40,000 and over seven years of un-filed back tax returns to file and pay. Within approximately twenty days we were able to get the Levy on the taxpayers wages stopped, the IRS tax assessment voided and the taxpayer back in the good graces of the IRS. Previously the IRS had assessed taxes as the taxpayer had not yet filed the returns. Therefore the first step was to notify the IRS that we were working with the IRS and file a Power of Attorney to represent the client, then to file the returns for all of the unfiled tax years, while being sure to ensure that each and every return filed represented the taxpayers lowest legal possible tax. Below is an excerpt from a recent letter of that client:

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Here am I. Send Me: Serving the Homeless of Atlanta This Thanksgiving...Taking Christianity Into the World

Then I heard the voice of the Lord saying, "Whom shall I send? And who will go for us?" And I said, "Here am I. Send me!" Isaiah 6:8

Each year my Lord and Savior calls me deeper into His embrace and it is at this point I find myself asking you, "what will you do this Holiday Season to serve God?" Though family events, buying gifts for loved ones and spending time with those to whom I hold most dear, there can be no bigger gift to my wife, my children and to my God than serving Him this Thanksgiving and Christmas. On Tuesday, November 17th we are going to gather at Sugarloaf United Methodist Church (1795 Old Peachtree Road, Duluth 30097) in the Town Hall at 6:30PM. You do not have to be present to serve God with us. We will need many behind the scenes preparing lunches and preparing yummy casseroles to take with us.

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Advice on Investments and Christian Money Management Taught by Metro Atlanta CPA

I recently received an inquiry from a client regarding their capital losses and their investment decisions and it is listed below:

John, I need to know how much I have in carryover losses to apply to this year's capital gains. I'm trying to decide if I need to sell off some of the gains I have this year to offset some of the loss from previous years. Thank you.

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Who Are You Serving This Thanksgiving?

Holiday Service Opportunity: Feeding the Homeless in Atlanta...Taking Christianity Into the World

My wife and I were blessed to be able to serve at 7 Bridges to Recovery where we met Pastor 7 and his men! This Thanksgiving in 2009, we will be serving the homeless men and women of Atlanta as we bring a Thanksgiving feast and God's word to many people living under the bridges of the streets of Atlanta and some canned goods to the shelter. We will also be collecting jackets and sleeping bags to help keep those who cannot do for themselves warm this upcoming winter. Read more

Missions Lite: 2/3 Less Time Consuming than Regular Missions...Taking Christianity Into the World

I feel God asking me to discover if there are those about us who might be willing to start a new mission series I am calling Missions Lite. The work may not be lite but the time and financial commitments will. Rather than a week trip, Mission Lite will be for over weekends and will be within driving distance of Sugarloaf United Methodist Church. The added advantage of Missions Lite is in their shorter distance and time period that the costs will be much less than a week's trip.

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Bookkeeping to Business Owners & Financial Statement Preparation

Entrepreneurs either initially or over time become extremely proficient in their field of choice for it is by this growth of knowledge and wisdom which affords them the insight to make prudent decisions. Having served as a CPA in Gwinnett for decades I have learned that having a well organized set of books is the first step in preparing for your business success. Each and every hour of a business owner's day, there are a series of insignificant and important thoughts and directions that directly impact the profitability of a business. Continually you are faced with making a positive impact towards bringing your business closer or further away from your goal. A company's financial statement is the measuring stick by which you are able to gage a company's progress along the business continuum and are able to accurately measure the distance between where you are and where you want to be. To this end we work with Atlanta Business Owners to Ensure that their bookkeeping stays current, relevant and useful. Below is a sample of what we might sent to a business owner to work with them regarding their internal bookkeeping issues:

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Safe For The Whole Family...Missions Lite...Taking Christianity Into the World

What is missing in most churches throughout America is the opportunities to serve God together. For it is in our joint service and in our leading by example that our children can best get a glimpse of what Heaven and Jesus are truly all about. Though we want to take our children to church to learn about the Redeeming Power of Christ, missions are one of the best places to watch Christ be revealed again and again in marvelous ways too dramatic for words to adequately explain or words to recommend. In short, missions and the Power of Christ morph people into being more like Him. Below is a recent e-mail I received about our missions efforts and the joy of Joint Family Mission Work:

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Utilizing the Incorporation Process for Your New Business by Atlanta CPA

So you have started a new business and now need tax advice to take your business to the next level and to ensure that you set up as the correct/best legal entity type for your new business. Choosing to incorporate your business as a corporation will do much to protect your personal assets from legal liability issues while potentially shrinking your overall year-end tax obligation while also providing benefits for yourself, as well as your employees. We are here to serve you as you make this important decision. Over the decades we have helped thousands pursue the dream of owning their own business and helping them understand and utilize the entity choice that is best-suited for their business. Having served as a CPA in Atlanta for decades, selecting the right entity is perhaps the single most important financial business decision you will ever reach for your newly started business.

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News for America's Business Owners: Understanding a LLC, LLP and Partnership When Newly Incorporating  

Having served as a CPA in Metro Atlanta for decades I frequently have the opportunity to sit down with a new business owner who had been blessed to be fairly profitable in a very short amount of time. However, for convenience when the business was originally incorporated they did not take the time to sit down with a Certified Public Accountant to discuss the tax nuances of different entity structures. Understanding these differences is essential to wise and prudent entity and tax choices.  

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Should You Convert Your New LLC to an S Corporation for Tax Return Preparation Purposes Provided by Atlanta CPA

As a CPA in Metro Atlanta for twenty eight plus years, we frequently help business owners each and every year convert their business over to an S Corporation for tax purposes. For the first two decades of my practice, this was predominantly limited to C Corporations converting to an S Corporation, as previous to that time, LLC statutes had not been passed. However tax law for many years has allowed an LLC to legally convert over to an S Corporation for tax purposes. Although being an LLC offers some flexibility (no Board of Directors/ease of formation), being an LLC will typically result in many businesses paying an higher tax bill on its earned income as all of an LLC's net income are subject to FICA and Medicaid taxes.

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Navajo Family Indian Missions Video...Taking Christianity Into the World

If you believe a picture is worth a thousand words then perhaps this is a Million Dollar Video. I invite you to see what God is doing with Navajo Family Missions as we Take Christianity Into the World.

I entreat you to pray before you watch, that you watch with a open heart, and then that you listen to the Lion of Judah, Our God, speaking to your heart. Perhaps your family, your church, your Bible study group might join our Family Missions Work to the Navajo as we call down the power of Almighty God as we Worship, Grow and Serve Jesus Christ. See God at work at http://bit.ly/QS0V9  If you listen and watch with an open heart, it will change your world.

We feel led to take Christ to the Navajo Nation (approximately the size of West Virginia). We are looking to take our model of service to the Navajo in Pueblo Pintado by partnering with churches, Bible Study Groups, Rotary, Chambers of Commerce and Kiwanis and then branching out to other locations on the reservation. We are looking for groups throughout America to speak to with the stated goal of:

-Encouraging Individual Family Involvement of Members of Your Group.
-Introductions to other Civic and Bible Study Groups, Rotary, Chamber of Commerce, Concerned Citizens and Faith Based Group.
-The prompting of the Holy Spirit (at one of our last Kiwanis Groups one of the men decided to staff the local High School with all of the football equipment they need to start a team.

To gain a glimpse of our vision visit or if your church wants to get involved with our work visit http://www.hiscpa.com/blog/2009/07/30/casting-a-vision-navajo-family-missions-taking-christianity-into-the-world/

Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it! Read more