Failure to Plan is Planning to Fail. It was the best of times; it was the worst of times.
March 01, 2021
Picture this- Your company had a large jump in revenue in 2020. You are thrilled that your company made money during a tough economy. You start thinking your company hit great revenue numbers in 2020, so 2021 should be great, right? Then reality in the form of the Tax Man comes knockin' on your door to collect his portion of your profits.
You worked so hard to get where you are today, but you feel the tax implications penalized you for a successful year. You ask yourself what you could have done to prevent this large tax bill and added stress. It feels like a bad dream, but it is not a dream at all when you need to pay your taxes.
What you didn't do is meet with your CPA to discuss tax strategies in advance. Companies that wait until tax filing deadlines lose out on the opportunity to partner with their CPA to take proactive steps to identify ways to invest in your business and reduce your tax bills.
Here is a better version of the story of one of our clients. As stated in the scenario above, the client's business earned a record revenue in 2020. Our client met with our team CPA before the tax deadline to review her financial statements allowing our team the ability to find options that allowed our client to reduce her taxes. Our client was prepared and had a plan for the 2021 tax season.
Her plan included:
- Paying her employees well for their dedication.
- Investing in equipment for her business before year-end.
- Setting up a defined benefit retirement plan for herself.
The result was the client saved her $100K in taxes! By taking proactive measures in meeting with our team, we helped her invest in her business and retirement. Our client is thrilled with the outcome.
Meeting with your CPA should be viewed as an investment in your company. Determining your tax strategy is imperative before year-end and before any significant transactions such as acquisition, expansion, or dissolution. Every business has different priorities and unique challenges. At Cambalizza and McGee LLP, we take the time to understand your business and what makes it unique. Our team is dedicated to building lasting relationships with our clients - and we take pride in partnering with our clients to help them navigate the complicated tax rules. Make informed business decisions about your company's future by scheduling time with your CPA.