Real Estate Developer Realizes Significant Year 1 Tax Savings
- Real estate manager and developer in Northern California
- Company has been in business for over 15 years, generates approximately $30M in revenue annually, and employs 10 people.
- The Company was using a small CPA firm that was unresponsive and untimely and not proactive with annual cost savings ideas.
- WFY was referred to the client by an accountant from one of the investment properties.
- Wright Ford Young was engaged to assist with cost segregation studies on the investment properties and to deliver on annual tax preparation and compliance services.
- WFY prepares and delivers K-1 tax returns for the partners and corporate tax returns for the investment entities. Several entities require WFY accounting support to roll-up business activities into reporting LLC entities.
- Our CPA firm performs business consulting services, including the guidance to modify the investment holding period for carried interests in order to benefit from a lower tax rate.
- Wright Ford Young delivered overall increased tax savings in Year 1 of $3M above what the Company had been receiving from their prior CPA firm, resulting in a favorable positive impact on cash flow.
Efficient Entity Structuring Leads to Significant Tax Savings
- Company is located in Southern California, and primarily operates in the wholesale seafood industry.
- Company has been in business for 5 years, generates up to $5M in revenue annually, and employs up to 10 people.
- The Company was struggling on how to properly structure an asset buyout with the most efficient tax impacts.
- One of the owners of this newly formed Company is an existing WFY client. A satisfied and trustworthy client relationship is what led the Company to use WFY as well.
- Wright Ford Young was engaged to assist with structuring the new Company entity and implementing new tax saving strategies.
- WFY tax engagement partner designed a new tax efficient and lower cost entity structure that helped the owners save money on annual tax liability.
- Through ongoing dialogue with all the Company owners, Our CPA firm discovered how to more efficiently finance the Company operations and make an offer to buy out the assets from the predecessor company.
- WFY merged its tax knowledge into the business advisory services, which produced a profitable outcome for all parties involved.
- The resulting organizational structure that WFY designed was able to save the Company roughly $500,000 in tax savings to be utilized over the initial five (5) year period.
Significant Tax Savings Identified that Improved Client’s Profitability
- Company is headquartered in Southern California, and operates primarily in the computer software industry.
- The organization has been operating for over 15 years, generates between $5M-$10M in annual revenue, and employs between 100 and 150 employees.
- The company was spending a significant amount of money to improve its operational processes and develop new products.
- Senior executives were struggling with growing margin due to increased operating expenses over prior three years.
- Wright Ford Young was introduced to the company to help assess their current operating situation and advise on ideas to minimize tax liability, reduce costs, and improve operating margin.
- Our CPA firm was engaged to prepare annual tax returns and advise on tax strategy.
- During the initial tax compliance period, WFY’s engagement tax partner identified qualified and eligible R&D tax credits that had not been processed by the prior accounting firm.
- WFY encouraged the Company to engage in an R&D tax study to fully identify available and eligible tax credits to be used and reduce their annual tax liability.
- Wright Ford Young’s tax team successfully identified qualified R&D tax credits in the amount of $1M that resulted in a dollar-for-dollar reduction of their tax liability, thus creating a significant tax refund to the Company.
Dissatisfied Company with Prior CPA Finds New Tax Savings with WFY
- Company is located in Southern California, and operates in the furniture and fixtures sector.
- Company has been operating for over 35 years, estimated to generate between $5M and $10M in revenues annually, and employs about 30 people.
- The Company was struggling with an inefficient and uncoordinated internal accounting function.
- The Company found itself paying too much for annual tax prep and compliance services, and challenged with a CPA firm who was not proactive in offering timely guidance on tax ideas and strategies.
- Wright Ford Young was engaged to prepare the Company’s annual tax return and compile their annual financial statements.
- WFY realized that the Company was engaged in research and development activities that could qualify for tax credit treatment. Our CPA firm conducted an R&D study on the Company’s activities to determine eligibility.
- WFY also advised the Company to change their accounting method based on new tax laws to create a more efficient tax structure and generate substantial initial year cost savings.
- Our CPA firm developed a more streamlined and structured way for the Company to deliver and share information more easily with us, resulting in additional time and cost savings for both parties.
- Wright Ford Young has delivered approximately $70,000 / year in tax savings for the previously unidentified R&D Tax Credits eligible to the Company.
- WFY delivered an additional $300,000 in cost savings for tax year 2018 from the accounting method change.