CLIENT TOOL BOX
tax methodology
CLIENT TOOL BOX
99% of small business owners pay too much income tax. If you own a business or practice a profession, this includes you ...
In every instance, there is one solution that cuts income tax to the legal minimum. Every other solution will not.
The ELLIS claim to fame and fortune is our
unique methodology for methodically cutting
income tax to the legal minimum.
TAX AUDIT LIKELIHOOD
Call us 970-241-5040
email us
This is an important methodology … we would like to see it scientifically evaluated. Until results are measured and compared to the broad population of tax preparers, there is nothing to substantiate our claims. Given the confidential nature of the data, it is unlikely that will ever happen.
In lieu of scientific evaluation, we rely on anecdotal evidence of the superiority of our methods.
Perhaps the reason we stand out from other firms is the general state of ineptitude among tax preparers. The IRS has statistical evidence of widespread preparer incompetence, which they propose to address by testing tax preparers. We welcome that program and we sympathize with the IRS, but we don’t expect it to dent the incompetence we have seen.
In any event, we are supremely confident of our methods and what is unfolding here. Having worked with 1000's of business and professional clients over 35 years, the picture has become pretty clear that we are doing something that makes a profound difference on legal tax obligation.
It also improves every marker we care about … audit likelihood … simplicity of approach … and cost effectiveness. We have seen profound improvements in all those markers.
Now … as to our methodology …
Everything is directed toward the individual client, because ultimately, only individuals pay income tax. Every individual in every circumstance will have a different solution. If circumstance changes, so will the solution.
For the last three decades, Congress has been simultaneously increasing the reward and escalating the complexity by littering the tax code with a hundreds of tax preferences and a few penalties aimed directly at small businesses and professionals. Cutting tax to the legal minimum has become an issue of sorting and selecting preferences and avoiding penalties so the mix works together to cut income tax to the legal minimum, in this particular circumstance.
Our methods can take different approaches, but generally involve these three initial steps … when we pick up a new client, we strip the audit triggers, plug the obvious tax leaks and identify obvious missed opportunities.
Concurrently with that first step, we examine the ownership picture of each business involved and evaluate the life circumstances of each owner. The more owners, the more complexity involved.
Next, we address structural deficiencies. I believe there are 33 different entities that can file business tax returns. Each is taxed differently and each can take different deductions. Entities should be selected to accomplish specific goals.
Next, legitimate business purpose by entity.
Then, tax preference by entity.
The last step is usually coaching to identify legitimate business deductions that may be overlooked. This is a particular problem in family unit businesses because the lines between personal and business can get a little blurry.
This methodology cuts tax to legal minimum, virtually eliminates your audit
profile, maximizes cost effectiveness, and it’s a simple uncomplicated
approach.
It may seem complicated, but after 35 years we have refined the process, to a methodical approach with reduced complexity and condensed time requirements.
The crux of all this is …
There is one solution that cuts income tax to the legal minimum for each client. Every other solution will not.
Our methods are the only way you will ever get there.
And one more thing, this is not retroactive. They savings don’t start until we make them happen.
Call us 970-241-5040
email us
1. Review Prior Returns
2. Strip Audit Triggers
3. Review Life Circumstances
4. Review Tax & Business Practices
5. Select Tax Entity (ies)
6. Identify Legitimate Business Deductions
7. Identify Applicable Tax Preferences
8. Identify Applicable Tax Savings Devices
9. Plug Tax Leaks
10. Identify Missed Opportunities
11. Determine Valid Business Purpose
12. Identify Valid Business Deductions
13. Implement Tax Strategy
email us