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IRS Audit
My company was being audited by the IRS. The IRS auditor had been on our premises looking at documentation off and on for almost a year. We met with the auditor and he told us that we were going to owe more than $500,000 in additional taxes for just one year and that there were multiple years involved. Our CPA told us that we would have to find a way to pay it. We knew that there was no way this could be accurate. Our company had never even made that much money.
We began to call other CPA firms to find out if there was anything we could do. We called Meredith & Associates and Karen Meredith came to our office and spent about 2 hours reviewing our financial statements, tax returns and asking a lot of questions. Karen then arranged to meet with the IRS auditor. After meeting with the IRS auditor, Karen met with us and explained the tax issues to us in laymen’s terms. For the first time, we understood the accounting issues that were causing the problem. Karen was able to ask us more questions, and determined that our entire accounting process was wrong. We had been using the wrong accounting method to account for our business. If we corrected our accounting method, the IRS adjustment would be zero.
Karen met with the IRS auditor for a second time and showed the auditor all of the supporting documentation for the accounting method error. The auditor agreed that the Company’s accounting was not accurate. The Code and Regulation he was relying upon did not apply. The IRS auditor agreed that we did not owe additional taxes. We then hired Meredith & Associates as our CPA firm. They helped us change our accounting processes and also simplified our bookkeeping. Not only did Meredith & Associates save us hundreds of thousands of dollars in taxes, they also helped us save money simplifying our accounting.
Marwan S.
Rental Property
Meredith & Associates had a tent at the Byron Nelson golf tournament. They were giving away free golf balls, but you had to make a long trek up to their office on the 16th green to get the free ProV1’s. When I went up to their office, I talked to several of the people there and was impressed. I had been using the same CPA for several years, and had been paying a lot of taxes. Meredith & Associates offered me a free second opinion on my tax returns.
I made an appointment and brought both my company and personal returns. I met with Karen Meredith. She looked over the returns and started asking me a lot of questions. She told me that based on the answers to my questions; my prior CPA had mischaracterized one of my rental properties as residential rental, when it should have been classified as a hotel/motel type operation. She also brought up changes that I could make to my entity structure that would save taxes and pointed out some other missed deductions as well.
All together, the suggestions added up to more that $20,000 for one year. I hired Meredith & Associates to amend all my open years’ tax returns that contained the misclassified rental property and hired them to help me with tax planning and future year’s returns as well.
Justin H.
Entity Selection
We had been using Meredith & Associates for several years to prepare our c-corp return, but I had been doing our personal income taxes to try to save money. We use to make hundreds of thousands at the c-corp level, but we are getting into retirement age and started having losses on our gross income and on investments.
Jackie at Meredith & Associates took the extra time to not only prepare our corporation’s return, but to ask us some detailed questions about why we had the company organized as a c-corp. She prepared a cost benefit analysis showing us that we would be saving over 30k immediately if we elected s-corp status. We already saw 15k of that savings when I let her prepare our 1040 for 2008, and next year we will see the rest.
On top of that, there are additional savings by reorganizing some of our wages that are subject to Medicare and social security taxes into non-taxable distributions. I really appreciated the fact that M&A doesn’t just number crunch but actually analyzed our situation as a whole to find the best tax saving strategies possible.
I learned a valuable lesson that by letting M&A take over all of our planning and tax work; we end up saving so much more than what I could have done myself. It is so important at our age and in this economy to have the best team at work for us.
Jan B.
Sale of Business
I sold my lawn care company in 2008 for over $1.5 million and was really scared about the tax consequences. I’m one of those people that don’t want to have to know every detail about financials of my company so I can focus on the work that needs to be done.
That’s why I love Meredith & Associates; they are like having a CFO even though my company is family owned. I trust them to do everything possible to minimize my taxes every year and they always exceed expectations.
At first glance it seemed I would owe over 300k in taxes which I was ok with because that is only about 20% tax, and from what I’ve read I’m in the 33% tax bracket. This wasn’t satisfactory to Kathy at M&A so she found me over 35k in additional savings. She explained that my effective tax rate came out to 15%!
I think the reason is all worked out perfectly is because they originally setup my companies. It was in such an efficient way to minimize taxes and maximize my profit margin. I could have been in big trouble without them on my side.
Greg O.
Texas Margin Tax
We were referred to M&A through a friend who raved about them. We really didn’t want to go through the hassle of working with someone new because our old CPA had been with us for over 10 years. Our friend mentioned they do free second opinions, and we did feel like we were paying too much taxes for our company so we went for our hour consultation.
We were blown away when we met with Karen. She is a genuinely caring person who has setup a well oiled company from scratch. Before we even got into the tax nitty gritty, we were complaining about being disorganized, so she walked us around their office to show us some of the simple yet highly effective ways that her 20 employees get things done. They also have an IT group called Team Logic who helps us with QuickBooks technical problems now.
The greatest thing about our visit is that now we are paying 5k less in taxes to the TX Comptroller every year. That adds up fast! Karen explained that Texas recently implemented a new margin tax that has been hurting small business owners because we are taxed on gross revenue instead of net. So we could have an overall loss in the company but still owe TX money! Her team at M&A have studied the new margin tax so much that they found us ways to reduce the tax that our old CPA had no idea about. We immediately switched over to her and haven’t looked back.
Rob A.
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