I’ve been working on taxes since 2006 and am always surprised when I learn about other small business CPAs. One reason I started my firm is because I do not believe in cookie-cutter solutions.

I often advise clients on business entity selection, which should be tailored to the owner’s ambitions, current and likely future situation, and how the owner works with the business. Other CPAs have strategies they apply to every small business, regardless of its situation.

Recently I encountered a new client, an individual that did a little bit of sales consulting on the side. The CPA he used for years advised him to use an S Corporation, which can work well for some people because it can save them 15.3% on a good deal of income. However, it is not a trump-card solution.

In an S Corporation, the owner is also an employee, and the company can’t take deductions for a home office or mileage unless it follows certain rules. Also, instead of just having the business directly on his schedule C, the business had to file its own tax return. He only had

$1,000 of sales, but the tax return cost $400! The business only made $130 in profits, not including the $400 for the tax return. This cookie-cutter solution only saved my new client $20 in tax in 2012.

Because the business was not more than a side business and did not grow, we decided to terminate his S corporation. This will allow him more deductions and will save him on

his tax prep invoice from his CPA (which is now me).

When telling this story to a CPA colleague of mine, his response was, “Why not keep the S Corporation? Then you would also have a payroll client” (S Corporations are required to give their owners paychecks).

That’s the difference between Sundberg Tax & Consulting and other firms: we truly care about our clients, we don’t believe in cookie-cutter solutions, and we don’t see our clients as revenue.

We don’t do work to get rich. We help people with our experience, background, innovation, and ability, and we charge them a reasonable fee.

 — Justin D. Sundberg, CPA MBT, Founder

Download article in PDF