Gwinnett CPA Teaches Business Clients Tax Law While Focusing on Operating Results 

When a CPA does a tax return they are best suited to give useful financial advice that an owner can use to turn information into profits. Just as a doctor will give invaluable insight to their patient, a CPA should be a clients closest financial confidant. Below is a sample letter that might be sent to a client to assist both in ensuring future business profitability and adequate tax documentation for a corporate/business client:

Regarding Your Corporate Returns

-Your cost of goods sold (cost of doing business) is 90% leaving only 10% to cover salaries and other expenses creating a book and tax loss of $100,000. I suggest ASAP that we review our pricing guidelines and adjust so that margins are at least 30%. This would allow for you operating expenses to remain the same and break-even. To ensure profitability, given present expense levels, I would suggest your strive for a gross profit margin of  35%. Please be reminded that the K-1 losses that are not currently deductible due to basis limitations are called suspended losses and are rolled forward until you have sufficient tax basis.

-Tax law does not allow S Corporation owners to deduct tax losses only to the extent or your tax basis (which is calculated predominantly by prior retained earnings and current loans made to the company). Therefore only approximately $15,000 of your $100,000 of tax losses are deductible.

-Tax law requires all S Corporation owners to take a fair and reasonable salary given position and profit. Based upon your operating results you might consider lowering your salary until profitable levels are maintained, while being sure to maintain the reasonableness statutes required by the IRS.

Regarding Your Personal Returns

-Please get to me a copy of the year-end statements showing total mortgage interest, cash contributions to charity and real estate taxes.

-Please get to me the property taxes paid on your personal vehicles.

-Please get to me the original purchase price and date of your rental property.

-Please turn in an expense report to get reimbursed for your medical premiums

-I did not see Association fees on your rental property.

Bookkeeping for a Small Business
Learn the ABC’s of accounting for the business and financial operations of your business. Visit http://www.hiscpa.com/keeping-books.html 

Preparing and Reviewing Financial Statements
Financial results of your business are like a doctors chart of their patient, this will help enable you to understand financials and their use. See http://www.hiscpa.com/financial-statements.html

Monitoring Your Books at the End of the Month
Month-end control procedures are critical, as any variance to these will negatively impact the reliability of your internal financial. These are just a few of the tips we give clients each and every day. http://www.hiscpa.com/monthend.html

Contact HIS CPA PC (A Christian CPA Firm) today.

To learn more about tax entities and the taxation thereof visit http://www.hiscpa.com/article2.html There you will also discover a wide host of resources for American Entrepreneurs.

John Dillard is an Christian Speaker/Author and Certified Public Accountant in Duluth, GA. To See how he takes Christ along with him to work visit http://www.hiscpa.com/ and for his latest book Overcoming Life’s 9/11’s: Job’s Journey and a Voice of One: Nehemiah’s Prayer visit http://www.john-dillard.com/ or call John Dillard CPA today at 770.814.9304 (All Rights Reserved) Dare to Attempt Something so Great for the Kingdom of God that it is doomed to failure, lest Christ be in it!    

We advise clients on: IRS representation, Offer in Compromise, Tax Problems, Incorporation in Georgia, Corporate and Personal Income Tax Returns, Part-time CFO, Virtual Controller, Business Planning, Offer in Compromise, Back Taxes, Bookkeeping.

Serving Atlanta, Duluth, Gwinnett, Barrow, Bartow, Carroll, Cherokee, Clayton, Coweta,  Douglas, Fayette, Forsyth, Fulton, Gwinnett, Henry, Newton, Paulding, Pickens, Rockdale, Walton, Barrow, Bartow, Carroll, Henry, Newton, Bartow, Walton, Rockdale, Barrow, Spalding, Coweta, Dawson, Douglas, Fayette, Newton, Paulding, Spalding, Walton, Henry, Paulding, Douglas, Coweta, Canton, Covington, Douglasville, Druid Hills, East Point, Forest Park, Griffin, Lithonia, Mableton, McDonough, Milton, Mountain Park, Newnan, Powder Springs, Stockbridge, Union City, Villa Rica, Winder, Woodstock,  Smyrna, Sandy Springs, Marietta, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, North Fulton County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Milton, Norcross, Snellville, Roswell, Buford, Cumming, Grayson, Lake Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, Dunwoody, Gainesville, Decatur, Atlanta GA, Gwinnett County, North Fulton County, Cherokee County, DeKalb County, Hall County, Clayton County, Cobb County, Forsyth County, Hart County, Jefferson County, Duluth, Atlanta, Alpharetta, Johns Creek, Lawrenceville, Marietta, Milton, Norcross, Snellville, Roswell, Buford, Smyrna, Marietta, Cumming, Grayson, Hartwell, Suwanee, Sugar Hill, Loganville, Lilburn, East Point, Gainesville, Snellville, Buckhead, Buford, Peachtree City, Dunwoody, Kennesaw, Decatur, Conyers, Stone Mountain, Decatur. Sandy Springs, Peachtree City, Douglasville, Newnan, Griffin, Woodstock, Carrollton, Forest Park, Canton, College Park, Cartersville, McDonough, Riverdale, Fayetteville, Covington, Stockbridge, Conyers, Clarkston, Barrow, Bartow, Butts, Carroll, Cherokee, Clayton, Coweta, Dawson, and Douglas.

Related posts:

1. Award Winning CPA Serving Roswell, Johns Creek and Roswell Advises on How Using Net Operating Losses can Save Thousands
2. Gwinnett CPA Teaches Metro Atlanta Taxpayers Adequate Documentation to Prepare Your Income Taxes
3. Gwinnett CPA Teaches Incorporating Your New Georgia Business: Determining Who Will Lead Your Company Business
4. Gwinnett CPA Teaches Bookkeeping to Metro Atlanta Business Owners & Financial Statement Preparation
5. Duluth CPA Teaches Atlanta Taxpayers How to Record Losses from Your S Corporation

This entry was posted on Monday, November 2nd, 2009 at 11:10 am and is filed under Atlanta Business Consulting, Atlanta Corporate Income Tax & S Corporation Return, Financial News...How to Protect and Make Money, Personal Income Taxes.
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