Small Increase in Taxes Paid Yields Greater Long-Term Tax Savings

Background
  • Company is headquartered in southern California, and operates primarily in the sign and advertising specialties industry.
  • Organization has been operating for over 25 years, generates up to $5M in annual revenue, and employs between 15-25 people.
  • The Company was organized into an incorrect buyout structure from a former company, leading to tax inaccuracies and inefficiencies.
  • One of the Company owners was familiar with WFY through a relationship with a tax partner.
Approach
  • Wright Ford Young & Co. (WFY) was engaged to assist the Company with transaction structuring and to implement tax saving strategies.
  • WFY was able to design and deliver a permanent resolution to the incorrect buyout structure that corrected the tax reporting and increased tax savings.
  • WFY maintained frequent and consistent dialogue with the Company owners to reduce their anxiety and risk perception throughout the process.
Results
  • Wright Ford Young & Co. delivered a solution to the Company owners that yielded approximately $150,000 in tax savings over a 3 year period for an incremental investment of only $15,000 more in taxes.

Discovered New Tax Refunds to Avoid Bankruptcy

Background
  • Company is located in southern California, and operates primarily in the skincare industry.
  • Organization has been operating for over 30 years, generated up to $60M in annual revenue at its peak, and employed up to 25 people.
  • The Company desired a new accounting firm with a specialty in the cosmetic/skincare industry.
  • The Company was struggling with a lack of proactive tax guidance throughout the year from their prior accounting firm, and the Company felt that they were being over charged for the services delivered.
Approach
  • Wright Ford Young & Co. (WFY) was initially engaged by the Company to perform year end financial audits, and to prepare corporate tax compliance documents and personal tax returns for the business owners.
  • The Company was experiencing cash flow issues. WFY’s tax engagement partner assessed their current situation and
    identified a new tax pronouncement that the Company was eligible for and qualified to receive.
Results
  • Wright Ford Young & Co.’s tax strategy helped the Company to obtain over $1 million in tax refunds to avoid filing bankruptcy. This outcome kept the Company afloat until they found a buyer of the business for $60 million.

Company Turned to WFY for their Growth and Tax Savings Needs

Background
  • Company is located in Florida, and operates in pharmaceuticals preparations industry.
  • Organization has been operating for almost 10 years, generates up to $5M in revenue annually, and employs between 10-25 people.
  • The Company was experiencing fast growth and felt they were paying too much in taxes.
  • As a new operation moving into the California market, the Company was searching for potential tax savings ideas by continuing to have some operations outside of the state.
  • The Company was struggling with the feeling that they had outgrown their small practice CPA who could not keep up with the Company’s growth expectations.
Approach
  • Wright Ford Young & Co. (WFY) was engaged to provide timely tax savings solutions and business consulting services.
  • WFY identified a more accurate and efficient tax accounting method to better match the Company’s growth plans with their need to save on taxes to help finance their growth.
Results
  • WFY successfully implemented the change in accounting method for the Company, which resulted in a direct $250,000 of tax savings in year one and a projected tax savings of $20,000 to $30,000 annually for the next 2 to 3 years.

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