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Show January 13, 1999 ProvoOrem Chamber of Commerce Monthly Newsletter Page 2 PA Business Ygk (Counseling hey fo suMessGul business By Debbie Hamilton Times Reporter There are many concerns when setting up a new business, busi-ness, or keeping a successful one running. There are many decisions to bo made, including how to set up the business, and how decisions made will potentially poten-tially affect business taxes. With so many choices, and so many options available to business owners, it is vital to get good counsel when beginning begin-ning a business, and during times of growth or change. We have asked several CPA (Certified Public accounting) firms in our area to contribute to this week's Chamber Section. Sec-tion. These firms include Dodge, Evans, and Company, CPAS; Hawkins, Cloward, and Simister,LC; and Grant Thornton, LLP. Each has offered of-fered advice concerning the issue is-sue of business taxation concerns con-cerns for our readers. Dodge, Evans, and Company, one of the area's oldest and most experienced firms, began in 1954 with Aryid Dodge head-. ing up the firm. Arvid's son Martin joined his father, and has been with the business for 30 years. Today Martin Dodge and Kenneth Evans make up the ownership of Dodge, Evans, and Company located in Jamestown Square. According to Martin, "Business "Busi-ness taxes are not usually as dynamic or radical in their changes as are personal income taxes. But it is vital to business owners to be aware of the tax impact on their businesses, and to know what direction to go when setting up a business. People should be aware that a CPA firm has the expertise to guide and direct these important impor-tant business decisions. "Two of the changes in recent re-cent years include the Section 179 ruling that affects the rapid depreciation of business assets that cam be written off during the first year. Another is the Health Insurance Deduction Ruling that allows an increase in the amount of health insurance insur-ance a business is allowed to write off. "Tax and compliance reporting report-ing make up one of the important impor-tant functions of accounting. Tax accounting is a matter of legal compliance with the Internal Inter-nal Revenue Service rules and regulations, as well as State and Local laws and requirements. require-ments. Accountants need to know the numerous changes that can seriously impact a business's success and profitability. profit-ability. "Being aware of tax ramifications ramifi-cations is of key importance to businesses. It's critical to have someone who knows how to guide your decisions with a full knowledge of the laws, and the best interest of your business in mind. Many mistakes and costly choices can be avoided by seeking competent business tax . guidance." Dodge also said that a CPA is in a unique position to orchestrate or-chestrate a business's needs, having an ability to see the business from an overall viewpoint. view-point. They can determine when to bring in an attorney, if needed, and whether a risk-management risk-management (insurance) consultant con-sultant is needed. "There are sometimes needs for investment counselors, human hu-man resource people, executive search experts, policy and manual writing help: and the CPA has the breadth of knowledge knowl-edge to know when a business will be best served by consulting consult-ing with other disciplines. Many times these consultations are a one-time business set-up need, and not an ongoing one," "depending on the size and di-" rection of the given business. This sentiment was echoed by Ron Hawkins, of the firm of Hawkins, Cloward, and Simister; who with 47 years of experience, make up one of the longest established and respected re-spected firms. "Many times people don't have enough knowledge to set up a business on their own, or at least knowledge of many of the areas of consideration necessary nec-essary for the optimum business busi-ness success. They need to be aware of the different types of business set-ups that are available, avail-able, and ask questions such as, "What is the entity of choice?" "Should I be a Proprietorship?" Proprietor-ship?" "What about a Partnership, Partner-ship, or a Corporation or L.L.C.(Limited Liability Corporation)? Corpo-ration)? "Potential business owners need lo be aware of the different differ-ent requirements and tax structures struc-tures of the various business options, and be able to make the best decision for their business needs. Many people aren't aware of where to turn to get that kind of business advice. They might not know that a CPA firm has the expertise to answer any questions, and guide potential business owners own-ers to making the best decisions for their particular require- 1 if), STEVENSON G. SMITH ments and needs. A CPA firm has full knowledge of Federal and State rule and regulations regarding all aspects of any given business." Hawkins also expressed that one of the areas of concern is in choosing a retirement program, pro-gram, or even the question of whether to address a retirement plan through the business. There is a difference in retirement retire-ment plan parameters, and the rate of taxation that occurs in each. It's critical to know the differences, and to have some good advice and guidance. One of the major tax concerns, con-cerns, both for businesses and individuals, is the possibility of being audited. But that occurrence occur-rence does not necessarily mean trouble, according to Ron Hawkins. "So...you receive a letter from the IRS they want how much more? What can you do? Probably most importantly, don't panic. If you have notice of an audit, you can certainly call on the entity who prepared your taxes, or seek the help of a qualified CPA to guide you. "It's important to understand under-stand the process, and respond appropriately. Although the IRS accepts most tax returns as filed, some returns are selected for examination, or "audit,", generally on a random basis. The examination may or may not result in more tax. They may be closed without change, and in some cases there are refunds given. "The IRS tries to avoid repeat re-peat examinations of the same items. Thus, if they examined your return during the two previous pre-vious years and proposed no changes in tax liability, you should notify the IRS and the examiner may discontinue the exam or audit. "Audits can be handled through the mail or face to face. Most of the time, the exam will audit limited and specific items in your return. Your major decision de-cision at this point is to decide who will attend the audit on your behalf. You may represent yourself, or have someone accompany ac-company you, or with written authorization, have someone represent you in ycur absence. "If you agree with the results Continued on page 3 1! A : DODGE EVANS Certified Public Accountants Accounting Service & Audit Services Tax Planning & Preparation Business Ci Individual Consulting Service ' r--- x -. .' -;:' Estate Planning New Jamestown Location DODGE EVANS & COMPANY, CPAS, LC 3507 North University Avenue, Suite 100 Provo, Utah 84604 (801) 356-6700 Fax (801) 356-6777 E-mail: cpadodgeevans.com |