S Corp Hard Money Facts, Net Savings

People want to know costs, and while this might seem like more shameless self-promotion, you still need to understand what you are getting into. WCG specializes in S corporations which have a small number of shareholders, and often just a one-person show.

Sales pitch alert! WCG specializes in small businesses which have a small number of owners, and often just a one-person show. Did you know that 95% of all S Corps have only one shareholder, and 99% of all S Corps have three or fewer shareholders?

Common S Corp candidates and current clients for WCG are consultants, attorneys, financial advisors, insurance agents, physicians, chiropractors, doctors, surgeons, anesthesiologists, nurse anesthetists, real estate agents, contractors, photographers (the profitable ones), online retailers, FBA retailers and good ol’ fashion widget makers, among several others. We also have several medical groups and financial advisor teams operating multi-tiered entity structures.

The tax savings of an S corporation is not in dispute. But what does it cost to have tax preparation, payroll, tax planning and consultation done? Because small businesses are a core competency for us, we have created Business Advisory Services packages that includes the following-

	A la Carte*	Vail	Telluride	Aspen
2022 Tax Planning and Preparation
Tax Planning, Tax Projection Worksheets	$350 to $500
Tax Reduction, Shifting and Deferral Analysis	$350 to $500	Annual	Annual	Annual
Small Business Tax Deductions Optimization	Included
Section 199A QBI Deduction Tax and Salary Optimization	$300
Estimated Tax Payments (thru payroll withholdings)	Included
Business Entity Tax Return (Form 1065, 1120, 1120S)	$1,000 to $1,200
Individual Tax Return (Form 1040, joint filing), One Owner	$600 to $800
Expat / Foreign Income Calcs (Form 2555, FBAR, Form 8938)	$300 to $500	Add-On	Add-On	Add-On
IRS Audit Defense	NA
Situational Tax Law Research (up to 3 hours annually)	$750
Payroll and Accounting Services
Reasonable Shareholder Salary Calculation (RCReports)	$400
Monthly Shareholder Payroll Processing (up to 3 shareholders)	$1,200
Employee Payroll Processing (up to 25 EEs, bi-weekly, direct deposit)	$300 per month	Add-On
Annual Payroll Processing (W-2s, other filings, up to five 1099’s)	Included
Accounting Services (bookkeeping + analysis... see below)	NA	Add-On	Add-On	Add-On
Quarterly QuickBooks Consulting (QuickStart Launch)	$250, $750	Add-On
Business Advisory Services
Consulting
Business Consultation, Periodic Business Reviews (PBR)	$1,000	Quarterly	Routine	Routine
Complimentary Quick Chats (CQC)	$250 to $500	Routine	Routine	Routine
Interfacing with Lenders, Attorneys, Financial Planners	$500		Routine	Routine
Financial Analysis
Fractional Controller (monitoring 3rd party bookkeeping)	NA	Add-On	Add-On	Add-On
Financial Statements Analysis, Comparisons	$1,200		Quarterly	Quarterly
Cash Flow Management and Analysis	$750 to $1,000
First Research Reports, Industry-Focused Consulting	$350 to $600
National and Metro Economic Reports	$150
KPI Analysis, Benchmarking, Hot Sheets, Trend Analysis	$750 to $1,000
Budgeting, Forecasting, Goal Setting	$750 to $1,000
Strategy and Maintenance
C-Level Financial Advice, Strategic Planning (Fractional CFO)	$2,000 to $3,000
Succession Planning, Ownership Changes Consultation	$750 to $1,000
Annual Business Valuation	$2,500 to $3,000
Annual Corporate Governance, Resolutions, Meetings	$150
Annual Fee		$3,420	$5,760	$8,160
Monthly Fee		$285	$480	$680
		(prorated based on onboarding date)

Custom! Unlike the modern day new car packages where you have to spend $8,000 for the moonroof, our Business Advisory Service plans can be customized specifically for you. The array above is simply a starting point. If you need more from us, let’s chat about it!

Tax Patrol Services

We also have Tax Patrol! This is a wonderful tax service for those who don’t need all the business advisory bells and whistles above, but from time to time want some love from an experienced tax consultant and business advisor. Have a quick tax question? Need to know the depreciation rules as you buy that new car? Wondering what your April tax bill is going to be in August? Tax Patrol is like ski patrol… you might not use it, but you sleep better knowing you have it.

	A la Carte*	Keystone	Copper	Breck
Individual Tax Return Prep (Form 1040, joint filing)	$600 to $800
Business Entity Tax Return Prep (Form 1065, 1120, 1120S)	$1,000 to $1,200
Tax Planning, Tax Projection Worksheets	$350 to $500
Estimated Tax Payments Calcs	Included
IRS Audit Defense	NA
Complimentary Quick Chats (CQC)	$250 to $500	Unlimited	Unlimited	Unlimited
Annual Fee		$1,140	$1,680	$2,280
Monthly Fee		$95	$140	$190
		(prorated based on onboarding date)

The following are additional business services to get your venture launched and on the way. Some of these are teased out separately as one and done fees like formation and onboarding stuff.

Accounting, Payroll*
Monthly Accounting (bookkeeping + analysis)	starting at $400 / month
Bi-Monthly Accounting (bookkeeping + analysis every 2 months)	starting at $250 / month
QuadMonth Accounting (bookkeeping + analysis every 4 months)	starting at $175 / month
Sales Tax, Personal Property Tax	typically $75 / month, $150 / quarter
Employee Payroll (up to 5, bi-weekly)	$75 or $160 / month
* Accounting fees are based on 2 bank account with less than 250 monthly transactions and include the QBO fee from Intuit. Custom quote is available if you have a lot going on such as third-party integrations (POS, time billing system), accrual accounting method, extensive benefits packages and / or industry specific issues (e.g, job costing in construction). Employee payroll can be added to shareholder payroll for $75 per month if already using our Business Advisory Service plans above (e.g, Vail), or $160 for standalone. Custom quote for more than 5 employees and a referral to therapy.
Business Formation
Articles of Organization or Incorporation, Domestic Owners	$425 + state filing fee
Articles of Organization or Incorporation, Foreign Owners	$725 + state filing fee
Initial Report (if required)	$125 + state filing fee
Employer Identification Number (EIN)	Included
Single Member Operating Agreement (SMLLC)	Included
MS Word Templated Bylaws Agreement (Corporations)	Included
S Corp Election, Timely Election (made with formation)	Included
Accountable Plan	Included
Onboarding
Payroll Accounts Setup or Transfer	$300 to $450
Accounting Setup or Transfer (Fractional Controller)	$300
QuickStart QuickBooks Setup and Support (90 days)	$750
S Corp Election, Timely Election (within 75 days)	$250
Late S Corp Election Back to January 2021	$450
Examine Prior Tax Returns	Included

Prorated Fees

Some more things to consider- when a partial year remains, our usual annual fee is pro-rated to not charge you for services you didn’t use (like payroll and consultation). However, a large chunk of our annual fee is tax preparation which is typically a built-in fixed amount of $1,600 (both business entity and individual tax returns). Whether we onboard you in January, July or December, we have to prepare a full year tax return. This increases the monthly fee for the remaining months of 2021 but the monthly fee will later decrease in January of 2022 to reflect the amounts above. Yeah, we make it sound like 2021 is just around the corner.

Payroll Processing

We make very little profits on payroll processing… we offer it as a convenience to our clients. One throat to choke with a single call can be reassuring but if you want to run your payroll, go for it! Everyone thinks payroll is a piece of cake; write a check and done. Nope… we see a lot of mistakes being made by clients especially the handling of health insurance and HSA contributions since there are special rules for greater than 2% S Corp shareholders. Then again, we don’t mind fixing what was broken.

Tax Returns

You can prepare your own individual tax return as well… but the benefit WCG preparing both individual and business tax returns is that we slide things around depending on income limitations and phaseouts.

Note: An individual tax return is what the IRS calls Form 1040 and refers to the entity filing the tax return (you, the individual, are the entity). However, a married couple are deemed to be one entity for the sake of an individual tax return. So, when we say we will prepare your individual tax return, it is meant to include your spouse in a jointly filed tax return.

Break-Even Analysis (does an S Corp make sense?)

Break-even analysis is based on our annual fee of $3,420. If an S corporation saves you 8% to 10% (on average) in taxes over the garden-variety LLC, then $3,420 divided by 9% equals $38,000 of net ordinary business income after expenses and deductions.

More sales pitch! Keep in mind that our fee of $3,420 includes your individual tax return which you might already be paying another tax professional to prepare. WCG has a handful of clients who are right at the break-even point of $38,000 but leverage an S Corp and our services to get tax preparation, tax planning and consultation.

You can always find someone to do it for less- we know that. At the same time, we have a vested interest in your success and provide sound tax and business consultation as a part of our service. Here is a link to our Periodic Business Review agenda that we cover throughout the year so our consultation to you is comprehensive-

wcginc.com/PBR

We also have written a webpage on end of year tax planning-

wcginc.com/EOY

And, to see our entire fee structure (transparency)-

wcginc.com/fee

Jason Watson, CPA, is a Senior Partner of WCG, Inc., a boutique yet progressive tax and
consultation firm located in Colorado and South Dakota serving clients worldwide.

     

Taxpayer's Comprehensive Guide to LLCs and S Corps 2021-2022 Edition

This KB article is an excerpt from our 430-page book (some picture pages, but no scatch and sniff) which is available in paperback from Amazon, as an eBook for Kindle and as a PDF from ClickBank. We used to publish with iTunes and Nook, but keeping up with two different formats was brutal. You can cruise through these KB articles online, click on the fancy buttons below or visit our webpage which provides more information at-

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Taxpayer's Comprehensive Guide to LLCs and S Corps 2021-2022 Edition