Steven A. Scott, CPA

Concerned about legal exposure and reducing taxes? There is no "one size fits all" answer to this problem. For example, real estate does not fit well inside corporations. Transferring ownership of an L.L.C. is more complicated than in a corporation. S-Corporations might provide tax benefit to a merchandiser, but it also means more annual paperwork and filings. Worse, some advisers are converting their clients to S-Corporations and placing them under intense IRS scrutiny! Each business should carefully consider its individual situation and consult with an adviser that has the "heart of a teacher." All of the tax, financial, and legal considerations should be weighed.

Financial statements are the way you communicate the condition of your business to your bank, other investors, and taxing authorities. Many businesses need dedicated accounting departments while others need only a part-time bookkeeper.

If you are a medium sized business, then you already have an accounting department that prepares your statements. However, you still need the help of a CPA for classifying difficult transactions and preparing financial statements according to generally accepted accounting principles.

If you are a smaller business, then you could save on fees by maintaining your own general ledger with accounting software! These businesses bring in their information and obtain financial statements on a monthly, quarterly, or annual basis after any necessary adjustments are made at the accounting office. (See the web page Software Help.)

Whether you are a general contractor, physician, retailer, or other business - why not explore the possibilities?

Every business in the world has a plan! Sadly, for most, the plan is "wait and see." Few pilots would fly their airplane without completing a preflight checklist. But many business owners fly into their daily operations without any consideration of their best tax and legal situation. Many talented entrepreneurs waste a percentage of their day-to-day efforts with inefficient designs.

Businesses must file tax returns. It is always smarter to prepare with "forward planning" than to attempt to form a defensible position while the IRS audit is already in session. With proper planning many transactions and business structures can be formed for best advantage.