Every year at this time, we remind you of the tax planning services we offer our clients. Tax Planning is where we analyze your books through the third quarter and then project out the remainder of the year and prepare a “mock” tax return. By doing this, we can project what your tax liability would be for your 2023 tax return based on the information we have now. We do these plans in October and November so that there is time before year-end to put things into place that may help REDUCE YOUR TAX LIABILITY.
NEW TOOL – REASONABLE COMPENSATION ANALYSIS
This year, we have another new tool that may help you better take advantage or your S status if you are an S Corporation and keep in good graces with the IRS. Reasonable Compensation has long been an issue for S Corporation shareholders. The two sides of the coin are that 1 – taking TOO LOW or no payroll can be a red flag for the IRS and result in costly taxes, penalty and interest and…2 – taking TOO MUCH payroll can result in unnecessary employment taxes. This year, we are offering an analysis of what you are currently taking versus industry standards for the tasks you are performing in your business. This involves an interview of how your time is spent but doesn’t take long on your part. Then we compare these figures and compute a reasonable figure using an IRS approved method which we can use to adjust your payroll as needed for next year and possibly even this year.
If you are always struggling with what you should be paying yourself, and you would like to do this analysis, please let us know so we can schedule time for the interview. This is a tool that can also be done separately from a tax plan if you would just like to do that. You can reply to this email to let us know you are interested in the REASONABLE COMPENSATION ANALYSIS or a TAX PLAN.