Accounting & Bookkeeping & Small Business Forum

[Bellsaccounting]

I have a meeting with a potential client. He owns a Plastics-machinery & equipment co; annual sales of 1.5 million. He will be interviewing a few accountants to help him. He wants to discuss tax saving strategies. My question is this: What tax saving strategies do you offer your clients? I don't know where to begin. I was hoping for a nice list of tax saving strategies? Is that possible? I'm extremely nervous, I know I can do the bookkeeping and payroll end but when someone brings up "TAX Saving Strategies" I freak..... Any advice would be greatly appreciated....

[GreinerII]

The tax savings strategies vary depending on several factors: type of business, location, need for temporary workforce (summer jobs), whether your client provides with child care facility, etc, etc.

When it comes to a business, one way would be to show a business owner how you can save him or her money on his or her taxes with credits. However, when you uncover a credit you will want to investigate how long that credit has been available to the taxpayer. Amending the taxpayer's previous returns may result in an even more positive result.

A good start would be Pub 954. The list of credits available is quite extensive, so you have to find out which one would fit your client's business.

[weds2800]

Howdy there! It's Terri. Since he has equipment and it sounds like he might have a lot of it, you should bring up a section 179 deduction. Based on this years limit, the first $430,000 in purchases earn him a $108,000 deduction. It is reduced for every dollar puchased thereafter dollar for dollar. One strategy I have used before is to then get equipment leases for all dollars above the section 179 limit (so in our example all equipment over $430,000) This is an off balance sheet strategy. You can also use what is known as a lease, lease back strategy to accelerate your depreciation. In this scenario, the bank you work with buys your equipment and then leases it back to you. The bank may be able to take 5 year property, depreciate it in in 3 yrs (more expense for you) and then in the end sell it back to you for a small residual value. I'm not sure if you have a banker buddy, but if you do you may want to talk with him/her about that. Hope that helps some and hope you are doing well!

[Richard Noot]

section 179 may or may not save taxes. you might want to check his business forecast before using this strategy