This isn’t news to any tax preparer (we have heard it all before) – Congress will pass last minute tax law, clients don’t get preparers information on time, the IRS has to delay processing tax returns. This posting by Daniel Hood summarizing an AccountingToday survey of tax professionals just writes down in stone all our tax preparer worries: http://www.accountingtoday.com/news/tax-season-worries-late-laws-late-clients-late-start-69023-1.html There is also talk of most preparers raising preparation fees this year. Well, with the cost of supplies, staff and other items (tax prep software, for instance) increasing, it is obvious prices will go up for tax preparation. As far as the other worries above, thank goodness for extensions! I have a feeling they will be going up, too. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Has been Featured On https://twitter.com/bstonercpa
Musings of a Burbank CPA: Cold Calling for Clients – Laughing From the Grave
This practice management musing talks of the merits and disadvantages of cold calling (in its many forms; not just picking up the phone.) This article in AccountingToday by Nicholas Keseric highlights various methods of acquiring clients and while he is discussing CPAs, it could also apply to other professions: http://www.accountingtoday.com/news/Laughter-Grave-Cold-Calling-Clients-69020-1.html While ‘cold calling’ in some forms can be effective (seeking out professional referrals through networking and asking your own clients for referrals), most of the time I have found the time and effort spent on other forms of mail and email without a directly interested audience isn’t justified. Today my most effective marketing employs a Search Engine Optimized website and using various social media outlets (mostly Linkedin and Twitter) to make yourself an ‘expert’ in your area of practice. If people hear about you and you are easily found through Google, your marketing efforts tend to result in more, higher quality clients. For financial, accounting and tax musings, You can count on us to count for you! Email: bstonercpa@sbcglobal.net Phone: 818-317-6035 Website: www.briantstonercpa.com Has been Featured On https://twitter.com/bstonercpa
CPA Tax Musings: S Corporation Compensation vs. 401K Contributions
Before the year ends, one thing I have been doing a lot of is year end business planning. I have a lot of entertainment and professional clients with S Corporations that need a sitdown meeting to decide how much compensation they need to take to meet the reasonable compensation rules, plus they have solo 401K retirement plans that they want to contribute to. This is where a decision has to be made – take the absolute minimum reasonable compensation (I have software that can calculate a compensation amount) and possibly forgo some 401K contributions. If my clients want to maximize their 401K contributions, they will need to take $134,000 in wages (the passthrough profit on the S Corporation K-1 doesn’t count) to get the maximum 25% employer contribution of $33,500 (134,000 x 25%). That plus the $17,500 maximum employee deferral ($23,000 if over 50) gets them the maximum contribution of $51,000 ($56,500 if over 50). The offshoot is that on the first $113,700 of wages the client will owe 15.3% of social security tax (12.4% FICA and 2.9% Medicare) but will get a tax savings on all the 401K contributions (if a California resident probably a third of the contribution.) Say the California client [...]