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

 

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 6/03/2006 01:01:00 PM Send this post: