Meet with a new client today we will call David. David owns a C-Corp that is in the retail industry. During our discussion he mentioned that he and his wife and cut payroll checks to themselves in 2010 but didn't cash them because their wasn't enough money in the company bank account. Between them they were holding nine checks with gross pay equaling over $20,000. Given the fact the company was strapped for cash the last thing the company or the owners needed to do is incur more taxes. Unfortunately for them that is exactly what happened. When the company issued the paychecks that costs the company and the owners over $3,000 in employment taxes (FICA) which has to be paid regardless if the checks are cashed or not. In addition federal and state withholding were taken out of the paychecks and had to be sent to the IRS and Oklahoma Tax Commission. As a result the company had to pay out over $4,000 in taxes between FICA and federal and state withholdings. A pretty tough blow for an already cash strapped business.
If you are having trouble making ends meet in your business you need to go talk to your CPA. There are a couple of reasons business owners don't meet with their CPAs:
- The business owner doesn't want to get billed for the CPA's time. If David would have spent around $300 for a meeting with a CPA that billed by the hour the result would have been over $4000 in tax savings. That is a pretty could return on $300. Knowing that may business owners will not want to meet because of the costs involved we charge a flat fixed fee to our business owner clients to insure there is an open line of communication between our office and their office.
- The CPA is too busy to meet with the business owner. If this is the situation you find yourself in you need to find a new CPA.
The economy is still pretty sluggish and small business can't afford to keep making mistakes with their money that could be prevented. Give your CPA a call today and setup a meeting if they don't have time to talk about your business then give us a call at 405-759-2796 and we will meet with you.