Tax Guru – Ker$tetter Letter

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Conflicting corp advice…

Posted by taxguru on March 30, 2008

Q:

Subject:  Does your information on C corporation vs. S corps apply to Personal Services providers?

Hi,

I’ve been reading a lot of your pages and I’m thankful for all of the great info. I even purchased a NOLO book (‘Deduct it!’). However, I’ve talked to 3 accountants, in my search for one to help us with our new company and not one has agreed with our decision to create a C corp. For the reasons you said most CPA’s steer clients wrong, the double taxation and extra paperwork. One even went so far to say that everything that’s deductible in a C-corp is deductible in an S-corp. and that I was paying the max. tax rate because we are a personal services corp.
The hubby will be a sub-contractor for a gov’t project providing consulting services, so would that make a difference?
Thanks for any help! If you don’t have time, a book recommendation that would have the answer is perfect, too!

 

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.

In regard to the problem with conflicting advice from different tax pros you speak with, I would ignore anything from anyone who proposes any strategy without asking you a ton of probing questions first.  Anyone who relies on “one size fits all” solutions is not competent to work with.

In addition, any recommendations should be accompanied with a reasoned and complete explanation of the specific reasons why that particular approach is best for your unique circumstances and why the other possible alternatives are not.  Any tax pro who cannot defend his/her recommendations properly should be avoided. Any tax pro giving any indication of reaching a conclusion for your situation without thoroughly evaluating all of your unique circumstances should also be avoided.

I wish I could be more help; but I already have too many clients to take care of properly; 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 specific to whom we could refer you. I did recently post some names and links for some like-minded tax pros around the country.   

If you haven’t already done so, you should check out my tips on how to select the right tax preparer for you.  
You should note that geographic location should not be the main criterion for selecting a tax pro.

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

Kerry Kerstetter

 

TaxCoach Software: Are you giving your clients what they really want?

 

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