Many businesses hire an accounting or tax adviser without experience serving all business entities such as Corporations, S-corporations, Limited Liability Companies (LLC) or Partnerships. This may lead to incorrect accounting reports or inaccurate tax returns as each type of business entity has its own unique accounting and tax rules. I have served all types of business entities since my career my began.I have represented small businesses, family-owned businesses, start-ups, publicly traded companies and companies with up to $1 billion in revenue.
Keeping up with constantly changing laws that businesses face requires years of expertise dealing with complex tax issues. Experience matters. Richard Pon, CPA is here to help.
My goal is to serve as your Competent Professional Adviser, my idea of a CPA, rather than just a number crunching Certified Public Accountant.
Business Tax Services and Business Consulting
We offer tax preparation to businesses including:
Corporation income tax return preparation
S-Corporation income tax return preparation
Partnership income tax return preparation
Limited Liability Company (LLC) income tax return preparation
Sole Proprietorship tax return preparation (as part of your 1040)
State and local tax return preparation (such as San Francisco payroll tax and San Francisco gross receipts tax)
Individual income tax return preparation for business owners, officers and key employees
Form 1099 Independent Contractor reporting - which is now due January 31
Besides preparing your business tax returns, we offer the following tax planning services:
Employee Retention Credit - Get up to $26k per employee. Act fast.
Choice of business entity planning - Corporation, S-corporation, Partnership, LLC, sole proprietorship -
Which is right for your business? In one success story, I advised on a business structure that avoided $10 million in capital gain income.
Cost Segregation studies to maximize depreciation deductions.
A cost segregation may be beneficial when buying a commercial property or making substantial leasehold improvements to your business location. A cost segregation allows a business to depreciate a portion of its property over 5-7 years rather than over 39 years; thereby, increasing your depreciation deductions. A cost segregation can be made several years after you bought the property or constructed your leasehold improvements. Depending on the size of your property, a cost segregation can lead to significant additional deductions. In many cases, I have seen cost segregation studies lead to deductions over $250,000 resulting in tax refunds over $100,000.
20% Pass-through business deduction available to sole proprietors, independent contractors, partners and S-Corporation shareholders
Compensation planning for key employees including stock option and equity compensation planning (NQ, ISO, ESPP, RSU, RS - I know the ABC song as well)
Disregarded entity tax planning for LLC and corporate subsidiaries
Nexus studies to determine state income tax or sales tax liabilities
Real estate tax planning
1031 “like-kind” exchange planning
Mergers & Acquisitions (M&A) due diligence - watch out for hidden tax traps!
Employee benefits tax planning
City & County Local tax return preparation
Tax Credit Incentive analysis
Seminars for employees (basics of tax; stock option basics; employee benefit tax issues; basic financial planning)
Sales and Use Tax consulting
Tax Planning for Emerging Industries such as Marijuana Dispensaries and Crypto-Currencies
Tax Planning for Qualified Opportunity Zones. Opportunity awaits to minimize capital gains through 2026.
Besides tax preparation and tax planning, we offer the following business services:
Accounting policy handbooks
Human resource policy handbooks
Internal Control recommendations
Interim CFO services
Budgeting
Forecasting
Profitability Analysis
Litigation Support
Employee Benefits consulting
Risk management consulting
Retirement planning
Buy-sell agreements
Partnership agreement planning
Business Tax Traps
Having served many business clients in a myriad of industries, here are several issues that organizations may not be aware of:
S-corporation distributions must be proportionate based on ownership. Having non-proportionate distributions creates a second class of stock terminating your S-corporation election.
S-corporations may not save you self-employment taxes. S-corporations must pay reasonable compensation. If your S-corporation has no employees it’s unreasonable to pay yourself a small salary for all the services you perform. This is always a focus on S-corporation audits.
California partnership withholding rules differs on whether the partner is domestic (i.e. outside of California) or foreign (i.e. outside the United States).
Pass-through entities such as S-corporations, Limited Liability Companies (LLC) or Partnerships may be taxable for state or local income taxes even though they are not subject to Federal income tax. For example, the Texas Margin tax or New York City Unincorporated Business tax may apply.
For multinational groups with corporations organized outside the United States, they may be subject to California income tax even though Federal consolidated tax returns exclude foreign corporations.
The June 2018 WayFair Supreme Court case may cause many businesses to file sales tax returns in 45 states as many states will adopt economic nexus rules forcing out-of-state businesses to collect sales tax. 35 states have economic nexus rules with many that began October 1, 2018. Companies may have sales tax liabilities to report under ASC 450 as a loss contingency.
Even without a physical presence in the European Union (EU), EU Value Added Tax (VAT) must be collected on business to consumer customers.
Businesses (and individuals) who buy goods and services without paying sales tax (or the correct sales tax rate) are subject to use tax. This commonly occurs when purchases are made out of state or if your business has a centralized procurement process for multiple locations.
Corporate estimated tax payments for quarter 4 are due December 15. Don’t fall into the trap of paying your corporate estimated tax on January 15 which is the due date for individual estimated tax payments.
