Client Background
A home-based catering business that grew rapidly needed tax preparation assistance after realizing they had underreported income and overpaid on self-employment taxes. The client hired Development Theory to do tax preparation for a home-based catering business.
The Challenge
Unreported Cash Sales: The owner had inconsistent bookkeeping, leading to income discrepancies on tax returns.
High Self-Employment Taxes: Without a structured tax plan, the business was paying excessive self-employment taxes.
Missed Deductible Business Expenses: The owner wasn’t properly tracking food costs, delivery mileage, or kitchen equipment depreciation.
Quarterly Tax Payment Confusion: No system was in place for estimating and making quarterly tax payments.
Our Approach
Income Reconciliation & Tax Filing Corrections: Reconstructed past revenue records to ensure accurate tax reporting.
Self-Employment Tax Reduction Strategy: Recommended S Corporation election, lowering the owner’s self-employment tax.
Expense Tracking & Deduction Maximization: Identified missed deductions for food supplies, vehicle use, and home office expenses.
Quarterly Tax Payment Plan Implementation: Developed a structured tax payment system to prevent future underpayments.
Tax Compliance Review & IRS Filing Fixes: Ensured all past tax filings were corrected, preventing audit risks.
The Solution
Corrected tax filings, avoiding IRS penalties.
Reduced self-employment taxes by 35%, thanks to S Corp restructuring.
Identified over $18,000 in deductions, lowering tax liability.
Created a sustainable tax payment plan, preventing large year-end bills.
Results & Impact
Saved $14,000 in taxes the first year.
Avoided IRS fines for income discrepancies.
Cash flow improved, thanks to structured tax planning.
Bookkeeping and tax prep simplified, making filing easier.
Client Feedback
"I didn’t realize how much I was overpaying in taxes. Now, my finances are organized, and I’m saving thousands!"
Development Theory Can Help Business Owners Like You
Looking to enhance your business strategies and maximize your financial outcomes like this business owner? Our Tax Preparation service provides you with insights that can elevate your business performance. Don't miss out on the opportunity to leverage expert knowledge for your financial success.
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