Q:

Subject: Yet another geek seeking wisdom

Hi Ken – Greetings from Panama City Beach, Florida. My husband and I just purchased an established small business, and would like to incorporate or become an LLC.  I have talked to several local CPAs for advice, read several books on the topic, and visited countless websites.  The result–disbelief at how three different CPAs, etc., have given me differing advice. I have a masters degree in communications, but my ability to comprehend data and info at a higher level is not working in this instance because every answer I receive leads me to another set of questions.  I ordered a book by Mancuso off your website and hope that will help out.

 

May I also ask your opinion? I know you can’t give advice, but could you steer me in the right direction to educate myself? Scenario:  My husband and I are both 52.  We will operate this business for about 10 -12 years–and then sell it (possibly to buy something that gives passive income).  The business net is about $100K annually–maybe more as time goes on.  We would like to purchase a new home soon (we own two properties currently), as well as save as much as possible for retirement. 

 

Any help will be appreciated.  By the way, do you still take clients?

A:

There are far too many options to consider and possible scenarios that can be used to achieve your goals for me to even begin giving you specific advice via this medium.

You will need to work directly with an experienced tax pro who can analyze your unique circumstances. I wish I could help; but I already have too many clients to take care of; so we are still trimming back on the difficult clients and are not accepting any new ones at this time. 

Unfortunately, we don’t have anyone to whom we could refer you. If you haven’t already done so, you should check out my tips on how to select the right tax preparer for you.

The fact that you would receive a wide variety of opinions from different professional advisors is nothing surprising. I’ve used this analogy many times; but business and financial advice is similar to medical consultations.  Without even knowing who said what to you, I would probably have much more faith in the person who took the time to ask you a ton of very personal and probing questions as to your current status and future plans. 

Anyone who just shot out a strategy without getting to thoroughly know your unique situation is being criminally irresponsible and should be avoided at all costs.  There are unfortunately too many tax pros who, either through ignorance or laziness, try to stick everyone they meet into the same type of business format without adequate analysis; S corps being the most common.  Anyone who was able to give you their answer before subjecting you to a barrage of questions would fall into that category and, while that answer may through sheer luck actually be correct, should be avoided.  If that person doesn’t understand the importance of a proper analysis, there is no guarantee that s/he will ever be able to give proper advice.   

I wish I could be of more assistance; but I wish you the best of luck.  

Kerry Kerstetter

 

From an eagle-eyed reader:

Subject: Typo on 2006 tax rate page

 

Just a note you have $366,551 as the top bracket in the Married filing jointly. It should be $336,551?

My Reply:

You have good eyes.

You are right.

I’ve made the correction.

Thanks for helping me keep things as accurate as possible.

Kerry Kerstetter

Follow-up:

No problem, I have referred to your web page for years. It is the best source for the ACTUAL number in the clearest presentation. I use a homegrown

spreadsheet to do my taxes at the beginning of each tax year to verify withholdings. I get my IRS numbers from your page each year.

So, thank you.

From Ohio CPA Dana Stahl:

Subject: Life League!!

 

Mr Guru – I haven’t visited your blog for a while (once again, I’m not getting the daily emails), so when I saw the email exchanges from “Liz-LifeLeague”, I was floored.  Jeez, she sound like some of my clients!

 

I didn’t know you were such an SOB!  (Keep it up!).

DS

My Reply:

Dana:

As we all know, there are plenty of nut-jobs out there.  Fortunately, most of the people who write to me are very nice and seem to be appreciative and understanding of what I do, and that wacko Liz is the exception.  I do have to admit that while I normally have empathy for and want to help readers who are looking at large tax bites, I can’t say the same thing for Liz, who deserves whatever happens to her.  With an attitude like hers, I can’t see any sane tax pro working very long for her.

The Bloglet service that used to send out my blog posts via email has shut down.  The best way to get them is by subscribing to its RSS feed, which is how I read most of the blogs I like (using Bloglines).  I did also set up a new email feed via FeedBlitz, which I tried to shift the Bloglet subscribers to.  You can subscribe to it from the box on the top right side of my blog page.  That seems to be working much more reliably than Bloglet.

Kerry

Follow-Up:

Mr Guru – as I said, “Liz” reminds me of some of my clients!  I’ve really been encountering a lot of unreasonable people in the past year or so.  One cardinal rule I’m trying to adhere to:  no more pain-in-the-ass clients. Sound like a plan?

DS

My Reply:

Dana:

That’s what we have been doing – dropping the PIAs and it has helped ease up on the stress level considerably.

Kerry