A fast-growing consumer product service company, located in Northeast Ohio, has been providing fulfillment services for its customers for nine years. The company lacked proper outside financial business counsel and was facing significant and unnecessary tax liabilities as a result.
In order to maximize the client’s tax savings, Skoda Minotti began the engagement process by conducting a highly technical and thorough evaluation of the tax laws impacting the business.
Following the evaluation, Skoda Minotti was able to:
- Change the way the client recognized revenue and by deferring their tax liability, enhanced cash flow and more accurately matched revenue and expenses.
- Complete a cost segregation study that resulted in a tax savings of approximately $125,000.
- File sub chapter S elections for the client’s six entities using a planning provision in the law that allows for late filings that meet specific requirements
The client’s 2005 tax liability was deferred and permanently reduced by $753,000.
Skoda Minotti will continue to work with this client to:
- Consolidate its six entities by using a sub chapter S Holding company, further streamlining its reporting to the IRS.
- Facilitate monthly reviews of the client’s financial information to assist in better managing the business and realizing further opportunities for the company to grow.
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