Converting your LLC to an S Corporation Might Save You Money

Though S Corps came into vogue in the 1950's when Congress passed legislation allowing business owners to pay their taxes on their business profits on their personal return, an Limited Liability Company (LLC) is a relative newcomer on the tax scene. Like an S Corporation the earnings from an LLC and their corresponding taxes are paid on the respective shareholders personal return. Though S Corporations earnings, as well as their shareholder distributions, have to be reported/paid based upon the S Corporations stock ownership, an LLC and its owners are legally able to allocate monies to its owners in any method or percentage that its members agree.

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Appealing Tax Issues with the Internal Revenue Service

When going to war, a soldier will plan, plan and plan again being sure that their tactics, protocols and training are ready for the task at hand. Though at times ones equipment and abilities will be tasked to the very edge of their capacities, the goal of a good soldier is to the extent possible to accomplish the task at hand while avoiding as few casualties as possible, preferably none. Similarly a great general who has a lay of the land, an understanding of the opposition and a firm grasp of the talents and capabilities of his men is most apt to be granted success than one who plows ahead unaware and unconcerned about the risks ahead. In fact, a prudent general will always perform substantive reconnaissance to understand and acknowledge what will be involved and required to achieve victory.

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IRS Offer in Compromise Can Save Tens of Thousands

Processing an Offer of Compromise is not for the faint hearted or ill advised. It is not something that I would suggest a client do alone or without a CPA whose experience and track record are provable, documented and verified. Many of our Georgia clients who are struggling with past tax problems, tax liens, tax levies, salary garnishments and other collection issues come to us, seeking wise and informed counsel. Finding a CPA who will tell you the truth, not lead you astray and who has your best interests in his heart will do much to ensure that your time, money and efforts are well intended. Finding a CPA who does not demand all of his money up front will help keep you informed and involved and help ensure that your CPA stays focused on the task at hand.

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How to Business Partner with Your Financial Adviser 

Finding a CPA who will become your business partner is an integral component of seeking to take your business to the next level. If your business has just reached or about to reach the million dollar mark in gross revenue or sales, you need to go out and find a CPA whose experience and wisdom match that of your needs. Left to our own understanding we are most apt to fail. Although I would never tell a client how to "do their business," adding financial and operational perspective from someone who "has been there and done that" will do much to lighten you load while assisting in making strategic operational decisions ranging from:

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Family Missions Video...Taking Christianity Into the World

As Believers we are all called to tell the good news of Jesus Christ as we take God along with us to work, school play and in fact, every place we go. Our family has opted to pursue Family Missions as one of the basic tenants and building block of our family. Though we do attend church regularly and actively participate in our own individual ministries, there is nothing that brings us together both physically and spiritually as when we lay down our lives, get out of comfort zone, and go out into the world to serve. Though many of you, if not most of us, have never gotten out of the boat listening to God's prodding as we seek to tell others of the great gift God has given us. Missions, though daunting initially, are one of the single most important things you can do as a Believer to change yourself, the way you see the world and to dramatically deepen your faith walk in a very short amount of time.

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Finding a CPA Who Installs Confidence in your Business and Financial Management

As a entrepreneur you now find yourself in the daunting task of not only running your business but also finding a CPA whose talent and experiences align themselves well with your business. I recently met with a potential new client who advised that their present CPA has had their tax data for thirty days and has not yet completed their returns. Also when the client needed to go to a bank to obtain financing for a future venture their present CPA said he was unable to help. So the client was not able to get their company financials on a timely basis and was unable to gain substantive insight needed and therefore not able to obtain timely and wise guidance. Also while at the client's office I learned that the business that they owned could easily be switched over to an S Corporation thereby legally avoiding the double tax associated with a C Corporation and they additional FICA/Medicaid taxes, as long as they paid a reasonable salary given position and profit.

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Net Operating Loss Carry-backs and Net Operating Loss Carry-Forwards

Tax law has long allowed individual taxpayers to carry back and to carry forward tax losses to offset reportable income in other years. Thus if a taxpayer has a business loss that is reflected on a return they can carry these losses either back for forwards thereby legally sheltering income and creating refunds that would otherwise not exist. Net Operating Losses (NOL) are opportunities for taxpayers who have paid taxes in one year to legally offset these monies against NOL's. Generally speaking a NOL is defined as the extent that allowable expense exceed deferred income and are carried back, by the taxpayer, two years or carried forward twenty years.

Claiming & Deducting a NOL Carryback Read more

Ministers' Compensation and Housing Allowance

A frequently misunderstood portion of tax law centers around the a minister's income and his parsonage/housing allowance. Generally speaking a minister's parsonage or rental allowance is excluded from his gross income when calculating his taxable income for income tax purposes. However, the parsonage allowance is not deductible when determining a pastors self-employment taxes that are due and payable.

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Alternative Sources of Funding Your Business: Understanding Asset Based Lending

What to Do When the Bank Says No

Asset based lending is perhaps one of the least know of all the funding opportunities a business owner or entrepreneur has at their disposal when traditional banking options fail. Banks traditionally have and continue to focus more on the track record of a business given its past results, history and profits. However an asset based lender is much more apt to loan monies to businesses based upon their present. For example if you a new business and still marginally profitable, a traditional lending institution is more apt not to make a loan to a business, especially in light of current business and economic conditions. However a asset based lender might be much more inclined to make a loan to you using your current assets, such as Accounts Receivable rather than your Profit & Loss statement to make an underwriting decision. Read more

Tips to Ensure your Ministry/Business's Financial Survival

These time tested techniques will do much to enlighten you to discover "hidden information" and relevant data as you prepare your 2008 Year-End Income Tax Returns. Whether you are in Ministry or a business owner looking beyond the numbers is the best way to discover critical and insightful news to help make wise and informed financial and business decisions. Whether you have a CPA prepare the return for your business or you chose to "go it alone" seeking out and utilizing this data will make you a wiser and more dutifully informed owner and entrepreneur. Evaluating and staying abreast of these key ratios, components and insights well help you steer clear of financial disaster:

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Commissioning Missionaries...Taking Christianity Into the World

Mission Commissioning

Throughout the broad extent of the country from which you will travel,
By your love of God and your love for others,
You have shown that you are Believers, not only with the knowledge of God, but also the willingness to share,
You have illustrated a desire and passion to lay down your lives for others. Read more

Tax Advantages of Converting Your C Corporation to an S Corporation

Recently I converted one of our C Corporations to an S Corporation. Filing a Form 2553, which is the IRS election that a company makes to be treated as an S Corporation, does this. The company was a profitable one and had income in the hundreds of thousands. By doing so, the company was able to avoid the double taxation that a C Corporation pays and only pay taxes once at the corporate level. In doing so we were able to save the taxpayer tens of thousands of dollars. S Corporations came into vogue in the 1950's when Congress passed legislation allowing business owners to pay their taxes on their business profits on their personal return. Although a corporate income tax return is still required to be file for an S Corporation the earnings from the business and their corresponding taxes are paid on the respective shareholders personal return. S Corporations earnings, as well as their shareholder distributions, have to be reported/paid based upon the S Corporations stock ownership.

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Entrepreneur's Guide to Successful Business Management

Utilize this informative checklist to ensure that you are well armed and informed to take you and your business to the next level. Covering a wide host of tax, operational and financial issues this is a checklist you will want to come back to again and again.

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Going the Extra Mile: Seeking First to Understand...Taking Christianity Into the World

Recently I did work for a client where the return, the IRS requirements and the coordination was especially difficult. In those circumstances, as in this one, I sought not to bill all of the time incurred out of both sensitivity to the client and to keep the client happy. Usually however, because of the extra exhaustive client and my work involved in a particularly troublesome and documentation rich return it is still problematic regardless of the sensitivity. However in my faith and in my walk with Christ, I believe it often much more important to be like Jesus in the marketplace. When a reticent client recently paid a bill in full, I felt led to return it, even though it appeared that we would receive no future benefit from doing so. So when I received the client's check I voided it and returned it writing the below:

When I sent the last letter I only wanted you to know what had transpired from my end. I was hoping to find common ground and peace where we could both be happy and comfortable.

I cannot accept the check and have voided and am returning.

I have always intended first to respect and to keep you happy and your business.

I hope this shows my commitment to do so.

Here's to many future Happy Returns.

John Read more

How C Corporations can Legally Convert to S Corporations Avoiding the "Double Taxation" Effect of C Corporations

If you think your taxes are bad enough, they can be worse. If your business is an C Corporation there may be substantive relief on the horizon. C Corporations can legally convert to S Corporation status saving thousands annually. C Corporations are taxed first at the corporate level and then again at the shareholder level as these monies are paid out to the owners. For Atlanta's Business Owners this is a "double whammy" they can avoid by filing Form 2553, Election to be a Small Business Corporation.

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Steps to Recover Financially in a Down Market

The markets of 2009 have thus far remained volatile. As of March 2009 the markets are down nearly 50% from their peak in October 2007. Financial concerns and economic news continue to make headlines. You may be frustrated, angered, and even shocked by recent financial events. However, it is important to realize that market declines invariably present potential opportunities.

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Tips to Finding a Good Financial Advisor

For those who have never hired a Financial Advisor it can be a daunting task. These core basic questions will do much to enlighten and empower you in making a wise and prudent decision. At the center of these questions is a desire to discover an advisors technical competency, to check their references and to see if you can establish a dialogue. For if you advisor is technically brilliant but cannot communicate you will have much difficulty as well as conversely if they are a good communicator but lack the skills and experience required you are apt to run into problems. These questions can also be easily adaptable to looking for a Certified Public Accountant or Lawyer.

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Business Sales and Acquisitions Tax Filing Requirements

Filing the Asset Acquisition Statement: Form 8594

When buying or selling a business one of the most frequently neglected tax forms is IRS Tax Form 8594: Asset Acquisition Statement. Generally both the purchaser and the seller must complete Form 8594 and attach it to their income tax returns (Form 1040, 1041,1065,1120,1120S etc) when there is a sale or transfer of a group of assets that make up or comprise a trade or business. The purchase price or basis in such assets is solely determined by the amount paid or the assets (i.e., the purchase price). The form is required, whether the group of assets constitutes a trade or business in the hands of the purchaser, the seller or both.

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Business Valuations: How to Prepare and Understand a Business Valuation

Whenever you are contemplating buying or selling a business, presently own your company, or in the midst of estate planning, the value of a business is a critical component in all planning, acquisitions, or marketing your business. The most essential component of preparing or understanding a business valuation is a requisite knowledge of how to prepare and review Financial Statements. By first understanding these you are now well poised to begin to detect and review the nuances of a company's operations, which then will provide insight so that you might be able to best Manage the Heart Beat of your Business.

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 LLC Corporations and  LLP Corporation Returns are Due April 15, 2009

The 2009 Tax Deadline for filing of your 2008  Corporate LLC & LLP 2008 Income Tax Returns is April 15, 2009. Therefore all calendar year corporations are due by that date. If for any reason you are not able to file your return by the due date both the IRS and state allows you to extend your return for six months. However don't let the extension "fool you." An extension to file is not an extension to pay as both the IRS and states require you to pay your taxes as you go. Corporate taxpayers, as well as individual ones, since World War II are required by tax law, to pay taxes as they make the money during the year. LLC's and LLP's are both "flow through" entities and as such the earnings from a Partnership Return/Form 1065 flows down to and is reflected on the individual returns on the owners. Therefore all of the tax planning issues, estimated tax payments to both the IRS and state, and any tax payment monies due with the extensions should be evaluated and considered at the individual owner/partner's personal income tax return level.

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