All Advice Isn’t Equal

VIDEO TRANSCRIPTION – All advice isn’t equal. We’re going to go through a topic where we talk to a potential client and we found out that we was able to get this woman over $80,000 in refund money. 

Hi, I’m Steven D. Cooper, also known as Coach Coop with Coopers Accounting Service, because your financial freedom matters. If you’d like to learn more great tax tips, download our proper financial guide on the website, yourfinancialfreedommatters.com or click on the link below. 

I was preferred by a potential client. She had what’s called a single member LLC. What is a single member LLC? It’s when you register the company through whatever state that you are residing in and she got what’s called a tax ID number or EIN number. That’s a nine-diction number. But you’re still filing tax returns on a schedule C. 

She was getting killed in self-employment tax. What is self-employment tax? That means on her net income, she was paying 15%. So basically every $100,000 that she was netting, she was paying $15,000 in self-employment tax. In layman terms, that’s Social Security tax.

Once we amended her tax returns, we figured out that we can elect her from filing taxes as a single member LLC as an S-Corp. By going as an S-Corp, we did two things. We reduced her probability of being audited at the single member LLC at 50 to 6 % to an S-Corp less than 10%. 

And we also was able to get rid of the self-employment tax in an escort you did not incur the self-employment tax. That’s how we’ll say, let’s get her back between tax year 22, 23 and 24, over $80,000. She said, okay, Coop, let me think about it. Call me back tomorrow. So we talked the next day, I called her. She says, Coop, I don’t feel comfortable with this.

I just want to go with 2025 going forward. Sadly, she had a person that’s in the same peer, they do the same work, she was audited by the IRS, and she wanted to pay $30,000 more. And what I tried to explain to her was this, the person that was preparing her tax returns was a tax advisor. At her firm, we are tax strategists, and we can represent her during that process. So was it fair? Or was it ignorance? It was a combination of both.

She was not aware of the tax strategies or the tax laws that she could take advantage of. And I tried to explain this to her, myself, along with the lady who prepared the tax returns. But sadly, between fear and going with other people that she had more trust in, so I politely told the lady, you need to go with a firm that meets your…let’s say reserve or conservative strategy going forward. But at the end of the day, we still wish you well.

For more easy financial tips, sign up for our financial tip newsletter by going to yourfinancialfreedommatters.com or click on the link below this video. You can also download our financial guide as well. If you’d like like a free 20-minute smart money consultation, call us 562-436-2600. Well again, I’m Steven D. Cooper, also known as Coach Coop with Coopers Accounting Service.

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