We Prepare Tax Returns!

We prepare most type of tax returns:

Individual. 

S Corporation.

C Corporation.

Partnership.

Payroll.

Amended.

Gary Bode, CPA is a Master's Degreed, nation wide accountant offering tax and business services. Member of AICPA and NCACPA. Our virtual office provides excellent service to long distance and international clients. Call (910) 399-2705 for a free phone consult.

Client Video Testimonials

Click here to watch some of our clients in their video testimonials!

Client Testimonials

I became totally and permanently disabled after a working for 44 years. I returned to college late in life (while working full-time) to fulfill my dream of becoming an RN and at that time found it necessary to secure student loans. Three years after being declared totally and permanently disabled my student loans were discharged. In January 2013 we received a 1099-C form declaring said student loans that were discharged however that amount could be considered as income for 2012. This was a large amount of money and we live on two pensions and social security income.

I started looking on the internet for information regarding 1099-C and felt that this was something that we could not handle alone. I made phone calls locally to a very reputable tax group in a city near us and they said it would cost $500 for an appointment and that they really prefer to do corporate taxes and they referred me to a local person who had worked for them at one time, we called and explained the situation and an appointment was made and then the comment was made that "I will have to do some research on this" and flags immediately went up and we called back and cancelled that appointment. I had been researching the IRSwebsite and every place else I could think of and I was not comfortable doing our own taxes this year. We called another local tax preparer that we had used in the past and made an appointment, however prior to the appointment, while still seeking information regarding our situation,

I came across a website for Gary l. Bode, MSA, CPA, PC in Wilmington, NC. I called Mr. Bodeand explained our situation and asked if he could help. He spoke very knowledgeably regarding the situation and stated that yes; he felt he could help us. As Mr. Bode was in North Carolina and we were in New York I scanned all of our documents including back-up documents for all of our claims and forwarded all to him. Mr. Bode kept in touch with us via email; we have spoken on the telephone several times and have become very comfortable with his knowledge and professionalism. Also, as I am a true "worrier" I have continued looking into information regarding our tax situation and I came upon another web page for Mr. Bode that included testimonials which spoke of his experience with this type of tax situation as it became prevalent during the recession. This reinforced in our minds that we had made the right decision in hiring this person as our tax preparer.

I share all of this as our taxes are now ready to be filed (we do owe tax for 2012 but not the astronomical figure we thought we were facing), and we are confident that they have been prepared with the utmost care by a gentleman who has an excellent working knowledge of the situation we faced and the tax laws that were applicable to said situation.

 

Bill and Carol

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Even though Gary enjoys helping colleagues, we no longer provide free consults to other tax preparers. He's happy to consult on an hourly billing basis if our schedule allows.

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IRS Form 1120-S | Proactive Tax Planning | CPA Wilmington NC

CPA Wilmington NC discusses Form 1120-S tax planning

Gary Bode, CPA: I believe in proactive tax planning. For a free initial phone consult on S Corporation tax planning, call us at 399-2705.

CPAs want their Form 1120-S clients to pay the least amount of tax legally possible. Proactive tax planning positions you such that potential deductions and credits aren’t missed secondary to IRS qualifications. Here’s an example of a technique that can’t be used retroactively.

“Taxes are a major expense. Proactively minimizing them is just good stewardship.”
Gary Bode, Wilmington NC CPA and tax accountant

Any CPA uses the first year of tax preparation to help reduce your taxes in the future. With new clients, CPAs also look at the prior year’s Form 1120-S to see if any deductions were overlooked.

Form 1120-S Payroll Tax Planning Example

Here’s our post on general IRS Form 1120-S compensation issues. Let’s look at Wilmington NC CPA, Inc., our demo company, set up as an S Corporation with the IRS. The primary shareholder decides how much her compensation is, within the realm of possibility of course. Her compensation comprises salary and non-payroll distribution components. Let’s say the salary component is $106,800 a year. Which is exactly the IRS wage cap on Social Security taxes for 2011. Once she takes the salary, the wages can’t be retroactively changed, so no amended return is possible. And the tax savings illustrated below are lost.

Why Would a Form 1120-S Shareholder/Employee Take any Salary?

This Form 1120-S example generally excludes non payroll distributions from Wilmington NC CPA to the shareholder/employee. Except that the shareholder/employee controls them. Such distributions aren’t subject to self employment taxes in S Corps, so why would she take any salary? Because the IRS expects some level of wages and can re-allocate distributions to wages. This could trigger payroll tax liability and penalties. So this issue always deserves consideration before filing the Form 1120-S. You can’t rely on this post to provide guidance on potential IRS action for S Corporation shareholder/employee salary to distribution ratios.

Social Security Taxes before the Applying the Technique

On the $106,800 salary, WNW pays 6.2% on it, $6,622, and she pays 4.2% , $4,486, for employer and employee Social Security taxes. $11,107 total. No way around that. And since she IS Wilmington NC CPA, she incurs the entire $11,107 Social Security tax. This isn’t like working for GE where they pick up over half the tab. Note the federal and NC total income taxes don’t change in this example, since any S corporation profit flows through to her Form 1040 return.

Social Security Taxes after Applying the Technique

Now, imagine Wilmington NC CPA pays her $86,800 in salary during 2011 by adjusting payroll in the last calendar quarter. And then paying $126,800 in 2012. So, $20,000 less this year and $20,000 more next year. I understand this takes good cash flow management.

Wilmington NC CPA pays 6.2% Social Security tax on the entire $86,800 salary in 2011. $5,382. She pays 4.2% on the $86,800. $3,646. For a total of $9,027. $2,028 less than the first scenario. Next year she and the company only pay Social Security taxes on the first $106,800 of the $126,800 anyway, because of the Social Security wage cap. Which is the $11,107 as derived above. NC and federal Income taxes are virtually the same this year and next year.

So with this technique, she saves $2,028 every other year.

This technique, like most tax planning, involves weighing the potential consequences against the benefits. Tax planning, in my experience as a CPA, uses multiple strategies simultaneously; there is seldom a single technique that yields astounding results. But they can really add up.

We’re a Wilmington NC CPA firm that operates as an S Corporation. So you know we stay on top of Form 1120-S developments. Our virtual office allows us to serve long distance clients with excellent customer service, and, makes life more convenient for our local clients. We offer a free initial phone consult at (910) 399-2705.

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