120 Newport Center Drive, Newport Beach, California 92660, United States
Our Services
INCORPORATION & RESTRUCTURING
The following is just one of our strategies that tests the efficiency of your tax strategy and reduce tax; there are over 100 others.
Hypothetical Taxation by entity type using your parameters.
EXAMPLE: Let’s pretend that your existing business --formed as an LLC and taxed as a partnership because the multiple owners are two unrelated individuals-- has averaged $1,000,000 net/taxable income (including owner comp) for the last 3 years, profit is divided evenly to both owners, non-owner payroll of $250K and total other-sources-income, per owner, is $50,000 (e.g. spouse’s W2 from her employer).
RESULTS if the business is a Specified Service Trade or Business [SSTB] (e.g. Physician, CPA, Financial Advisor)
Total Tax --- LLC continues filing as a PARTNERSHIP: $211,119.00.
Total Tax --- LLC Elects to be taxed as an S-Corporation $195,192.00.
If the business is NOT an SSTB, using identical hypothetical values, the Partnership’s total tax would drop to $188,681 and the S-Corp, almost $20,000 less -- i.e. $168,954.
By “electing” to be taxed as an S-Corporation, our Example clients saved 10.5% or approx. $20,000 in tax cost.
HANG ON, our analysis does not stop here.
In practice we’d continue by using a what happens if analysis:
what if…revenue drops; new equipment is purchased using a bank loan; new investment partners are brought in as entities rather than individuals; a partner dies or is permanently disabled; etc.
Our analysis continues because saving tax cost --by itself-- is seldom the impetus to elect out of the current business & tax structure.
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Tax Reduction Planning analyzes the Business Taxable Income generated by any active or passive trade or business. No business entity type is excluded (e.g. sole proprietor, partnership, LLC, C-Corp, S-Corp).
Before diving into any recommended tax-saving/ tax reduction strategy, we'll do a hypothetical cost-benefit analysis that includes current and future tax effects (e.g. cost seg of a new purchase building may increase depreciation current but cause large tax expense later).
To learn more, schedule your initial consultation and determine if your business qualifies for MSTG Tax Reduction analysis and if so, what
tax inefficiencies do we see and what tax reduction opportunities are not presently used but should be considered. Our commitment during the consult is giving you big-picture access to our intellectual property for up to 60 minutes without cost, regardless of any formal engagement.