As you are aware, an important part of our business is to advise our clients on how they can legally minimize their tax liability. We have specific expertise in this area and we know we do a good job without exposing our clients to the risk of non-compliance.
It concerns us, however, to see many business clients recklessly seek to minimize their taxes often at a cost to profitability and therefore at far greater cost in terms of the value of their business.
Let me illustrate what we mean. Suppose your profit was $1,000 and the applicable valuation earnings multiple was 3. If your average tax rate is 40% your tax bill will be $400. That hurts!
So what some people do is find a business-related expense they can incur in order to reduce this. Let’s suppose they can find $200 worth of deductible expenditures. Their profit drops to $800 and they save $80 in tax. The problem with this (often ill-considered) action is that unless that $200 was invested in something that would bring at least that amount back into the business at some time in the future, all that’s been achieved is to swap $200 for $80.
Not only that, the value of your business may also have dropped by 3 times the reduction in profit — (assuming a P/E ratio of 3).
The position that we take is that it makes much more sense to worry about the issue of tax liability after the profit has been made, not before. We believe that business managers should first concentrate on building profitability and value and only then on the issue of minimizing taxes.
As your tax advisers we can, and do, help you legally minimize your taxes. But as business advisers who are systematically helping you build the profitability and value of your business, we are able to contribute far more value to the relationship you have with us.
This is why we regard our business consulting services as being true value-added services. To the extent that we are able to help you accomplish your profit planning goals, our fees are self-financing. In other words, our fees are not a cost of business but rather a sound business investment. They also happen to be tax deductible.
We prepare hundreds of business and personal tax returns on an annual basis. Through our tax planning, we help you identify tax deductions or credits appropriate for your unique situation and help you identify opportunities for potential tax reductions previously overlooked. We understand how complex the tax environment can be, and have the expertise to help you integrate the best solutions for your family, or your organization.
BUSINESS TAX SERVICES
There are many opportunities available today that provide relief to growing businesses. We provide tax consulting services for companies from the start-up stage to multi-national organizations filing taxes in all 50 states. Our tax consulting team can provide you with a complete range of tax compliance services necessary to minimize your overall income tax liability.
Here are business tax compliance services that will help you be proactive in your tax planning:
Federal tax returns
State & local income tax
Sales tax planning
Cash flow enhancement
INDIVIDUAL TAX SERVICES
Personal tax and financial planning encompasses complex issues for financially successful individuals and families. We provide independent personal tax advice on your individual taxes, cash-flow and retirement planning.
Whether you are an individual filing a simple 1040 or filing taxes in all 50 states, you’ll find the expertise you need right here. In most cases, we offer a complimentary initial consultation to assess your ability to save taxes through retroactive filing and better future structuring.
Our services include:
Educational planning tax strategies
Strategic tax planning
Tax agency representation