Problem:
Sole proprietor manufacturers rep increased business growth created unexpected tax bill that doubled from the prior year. This was primarily due to the self-employment tax.

Action Plan:
We met with the client and determined that the business was actually a family affair with both spouses and one child working in the home based business. We restructured the organization into a new entity and put the child on the payroll. We also took advantage of several deductions not previously taken. We filed the necessary tax reports to formalize these changes.

Results:

• Client saved $5,000 in taxes
• Dad shifted income to teenage son
• Son was able to set up college fund