![]() ![]() There are many factors that can lead to this: lack of knowledge, confusing mark-up and margin, not tracking project costs, etc. We commonly see new home builders with gross profitability of 10%-15% when they should be closer to 25% to 28%. As certified NAHB trainers we evaluate the profitability of all our customers and compare how they are doing to the rest of the home-building or construction industry. We have an extensive review process to identify missed and underutilized tax minimization opportunities. The US tax code is the second most complex in the world (#1 is Brazil). We evaluated what tax laws, deductions, and deferrals could be utilized to minimize his tax bill. We elected to change his structure for significant tax and risk management benefits. Depending on the business, some are better suited than others. There are many different kinds (sole proprietorships, corporations, s corporations, partnerships, UBO, etc) and they all have different tax treatments. We reviewed the actual corporate structure that Jim’s business was set up with. Without going into all the eye-glazing details, here’s a high-level overview what we did for Jim: We have restructured his business to reduce the likelihood that he would be audited. ![]() In our first year of working together, we were able to save Jim over $100k in taxes. We will never make that decision on his behalf. As I mentioned to Jim in the field, all these changes will be priced upfront and it is “ok” for Jim to say “no”. Many accountants never propose new ideas because they are afraid that you will not want to pay for these changes.As builders ourselves, we know what is important to you and can explain in plain English why to do it. They often do a poor job of explaining why changes should be made and what the benefits are. For the accounting firms that do find ways to improve.One of our core values as a business is to always seek ways for our customers to improve. They never look for ways for you to improve. Many accounting firms feel their job is to “do your taxes”.Plus, we never get stretched thin by having to “keep up” with IRS tax law for other industries (professional services, manufacturing, etc). We know the building industry better than most. We are a 4th generation plumbing accounting firm and exclusively work with home builders or plumbing companies. ![]() They are “jacks of all trades and masters of none”. They will work with lawyers, doctors, manufacturing, restaurants, websites, etc. They work with anyone in any type of business. Most accounting firms are “generalists”.We explained to Jim that this is something we see all the time because: I am so happy I met you guys, but so pissed that I never knew all this!” To which he replied: “I just do not understand how my accountant could have missed all of these things for so long. So are you interested in making the transition to our plumbing accounting firm?Īt this point, we requested the prior two years of tax returns and access to his books, so that we could evaluate what exactly needed to be done for us to help One Creation Construction.Īs we met with Jim and reviewed these opportunities, we could see he was growing a bit upset. Would you like that?Īlso, we price all of our services upfront so you know exactly what our bill will be and can make a decision on if you want us to proceed with the work. Is that something that would put your mind at ease?Īnd every single project we do for a customer has a known completion date, in advance, approved by you, the client. Our CPA firm’s policy is to return all customer phone calls/emails within 24 hours, with no exceptions. Sound familiar? What Good Accountants Do… Despite being very loyal, Jim had grown frustrated and the time to make a change was now. Unfortunately, Jim’s accountant became more focused on his own retirement than on helping Jim. ![]() Jim always knew when his work was getting done, he understood what the accountant did and why he did it. How his team was handling the growth, but how he couldn’t stand that his accountant would never return his phone calls, especially with pending tax returns. He proceeded to tell us how his business was doubling in size every year. Jim had several homes actively being built and dozens more on the horizon. Guys were running around, lumber was laying everywhere. I first met Jim Lupinetti of One Creation Construction on his job site, while he was in the midst of framing a 2,600 square foot cape cod in an idyllic New Jersey neighborhood across from the park. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |