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Aviation Business Services
We specialize in accounting, advisory, and compliance for businesses focused on aviation
Albert Einstein famously said, “Strive not to be a success, but rather to be of value.” We have developed our business services around a core belief; provide exceptional value. Regardless if you are newly self-employed or a current business owner, we will spend the time necessary to create value in the service we provide to you whether it be helping you learn to do your own bookkeeping, mitigating your tax burden, or planning for small business retirement.
For existing business owners seeking accounting, payroll, consulting, and/or tax compliance services, please jump to the section(s) relevant to you. “Just Getting Started” provides new or prospective business owners a snapshot of what to expect as you begin working for yourself. If it all seems a bit overwhelming or you have questions beyond what is presented here, please contact us for an initial consultation.
Just Getting Started?
To those who are considering a venture into the self-employed or business owner ranks, please use this getting started section and expanded information that follows as an informational roadmap to help get your new business up and running. If this is overwhelming, or you really want us to do the heavy lifting, skip to the Consultation section and schedule a visit with us.
It is true that 30% of new businesses fail during the first two years of being open, 50% during the first five years and 66% during the first 10. Let us bring our business experience to the table and help you beat the odds.
The first step in becoming your own boss is to decide if you will be self-employed, or set up a business entity separate from yourself. The business entity selection and formation section below discuss more about entity types and which one may be best suited to your situation.
Once you have chosen and established your business entity, there is the all-important matter of “keeping score”. After all, you want to know if you’re winning at what you’re doing. The scorecard takes the form of accounting records, formally known as a general ledger and supporting documents.
The general ledger is also used to create payroll for employees, and you as a “shareholder-employee” if you establish a corporation. Many great tax benefits (books are written on the subject) are available to you as a shareholder employee in a corporation or S-type corporation through payroll. This voluminous discussion leads us to the benefits of consulting. Read on:
CONSULTING IS A FANCY WAY OF DESCRIBING WHAT WE DO THAT IS NOT ACCOUNTING, PAYROLL AND TAX PREPERATION.
As most of your attention will be devoted to running your business, the “back office” tends to get neglected. Periodically we will check in with you and ask to look over your general ledger. We often make recommendations that may either save you money, add to operating profits, and/or reduce your tax exposure. These recommendations may take the form of running payroll, strategic operational or capital spending, or year end tax moves. This is where we add the most value. Candidly, it is what we enjoy doing most. Consulting also takes the form of random correspondence from you asking us “what do you think about…” We encourage these communications because it is how we add value to your organization and it helps you avoid making common mistakes that can have real financial cost to you and/or your business.
As the business gets off the ground, you will find that compliance reporting (a.k.a tax preparation) is a necessary evil and a sunk cost of doing business. That said, non-compliance is not an option. We put considerable effort into preparing accurate tax returns for our clients, whether they be quarterly payroll reports, sales and use tax, excise tax returns, or income tax returns. We will advise you on compliance reporting dates and assure you have adequate records to be able to meet your tax reporting obligations timely and accurately.
THE INFORMATION IN THE PARAGRAPHS BELOW PROVIDES MORE DETAIL ON GETTING YOUR BUSINESS STARTED.
Lastly, we are happy to chat via phone or skype if you have questions and are considering our services. As a good faith measure, we charge $125 for thirty minutes. We will credit the $125 towards your first invoice if you elect to use our services.
Sole Proprietorship
A sole proprietorship is the simplest form of business structure and requires little in terms of startup. You are your own business and there is no legal separation (read: liability protection) for non-tortious acts. A Federal Employer Identification number (FEIN), and state payroll related filings if you plan to have employees, are the only required filings.
A sole proprietor reports their business revenue and expenses on Schedule C of their personal income tax return annually. Because you are paying both the employee and employer portions of social security and Medicare tax in addition to income tax on your net business income, a sole-proprietorship is one of the highest tax structures for small business owners to be in. It is also the reason folks look to an S-type corporate structure. More on this below.
A sole proprietor is someone who owns an unincorporated business by himself or herself. However, if you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.
Limited Liability Company (LLC)
A limited liability company (LLC) is a business structure allowed by state statute. Most states also permit “single-member” LLCs, those having only one owner. An LLC is formed by filing articles of organization with the Secretary of State. The IRS will treat an LLC as either a corporation, S-type corporation, or partnership, or as part of the LLC owner’s tax return (a “disregarded entity”) based on one-time elections made by the taxpayer when the LLC is established.
Partnership
A partnership is a relationship existing between two or more persons carrying on a trade or business. A partnership is formed by filing with the Secretary of State. A partnership must file an annual information return to report the income, deductions, gains, losses, etc., from its operations, but it does pay income tax. Instead, it “passes through” any profits or losses to its partners. Each partner includes his or her share of the partnership’s income or loss on his or her individual tax return.
Corporation
A corporation is formed by filing with the Secretary of State. Prospective shareholders then exchange property for the corporation’s capital stock. For federal income tax purposes, a C corporation is recognized as a separate taxpaying entity. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders. The profit of a corporation is taxed to the corporation when earned, and then is taxed to the shareholders when distributed as dividends. This creates a double tax scenario. A C corporation must file an annual tax return to report the income, deductions, gains, losses, etc., from its operations and pays tax on its reported income. Shareholders cannot deduct any loss of the corporation.
S Corporation
An S corporation is an LLC or corporation that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. A corporation or LLC makes a one time election to be taxed as an S corporation. Shareholders of a corporation, or members of an LLC, electing to be taxed as an S corporation report the flow-through income and losses on their personal tax returns and are assessed tax at their individual income tax rates. This allows S corporations to avoid the double tax structure of corporate entities.
As a quick review, If you choose to form an LLC, corporation, or partnership you will need to file with the Secretary of State to register the business, and file Articles of Organization or Incorporation. Once the state filings are accepted and you have a FEIN in place, you will elect how you want the entity taxed at the Federal and State level.
Your choice of business structure is based in part on minimizing the tax burden created by the business. There are typically two tax structures to consider when choosing your entity type; income tax and payroll (self-employment) tax. The combined payroll tax rate is 7.65% each for employers and employees, for a total rate of 15.3%. Mitigating this combined payroll tax rate is the major driver of S-type corporation structures.
Sole Proprietorship
Sole Proprietorship – Revenue and expenses will be reported on Schedule C and the resulting net income will flow to your Form 1040. Your self-employment tax obligation will be computed on Schedule SE. You are required to pay all tax due no later than April 15th, and if granted an extension of time to file, file your return no later than October 15th.
Single Member LLCs
Single member LLCs – Even though an LLC is an entity legally separate from you, the IRS considers it a disregarded entity for tax purposes (unless you elect otherwise); same tax reporting structure as a sole proprietorship.
Multi-Member LLCs
Multi-member LLC – this is a bit trickier. If you are a husband and wife multi-member LLC, and you live in a community property state (AZ, CA, TX, WA, ID, NV, NM, WI), you will file two separate Schedule Cs along with your joint form 1040. If, however, you live in a common law state, and you and your spouse are considered to be in a joint venture, then a Form 1065 Partnership tax return must be filed. Each partner share of partnership net income, credits, gains and losses will be passed thru to Schedule E on the personal tax return. You are required to pay all tax due no later than April 15th, and if granted an extension of time to file, file your return no later than September 15th. Non-spouse multi-member LLCs and straight up partnerships also file form 1065.
Corporation
Corporations – The filing deadline for C corporations may file a timely extension no later than April 15th and file their tax returns no later than October 15th. The last installment of estimated taxes must be remitted by December 15th of the tax year (as opposed to January 15th for individual income tax estimated payments).
S Corporation
S-Type Corporations – This is a Corporation that has made a one-time election to be taxed as a flow through entity. File form 1120-S, US Income Tax Return for an S Corporation. You are required to pay all tax due no later than April 15th. Provided an extension to file has been made timely on or before March 15th, Form 1120-S may be filed no later than September 15th..
Depending on the state your business resides in, there may be sales, use, and/or excise tax returns due quarterly and/or annually. We will lay out the calendar for you and guide your hand on setting up the reporting. You can take it from there, or we are happy to help for a small fee
An Engagement Letter and Collecting your Documents
The Oregon Board of Accountancy, American Institute of Certified Public Accountants (AICPA), and the IRS strongly encourage written Client Engagement Letters.
An Engagement Letter is not a binding contract on you, it simply clarifies your and our expectations associated with service. The engagement letter will also spell out our fee structure. We will email an engagement letter for your review and digital signature after our initial phone consult. It can be digitally signed from any phone, tablet, or PC. A signed copy will be automatically sent to us and a copy sent to you.
With the Engagement Letter completed, we will establish a secure document portal account for you. Using the camera on your phone or tablet, take pictures of your tax documents and upload them automatically to your portal. No scanning, mailing, or faxing required. We will provide you with a short Q&A checklist to assure we have captured all the necessary deductions and credits.
Preparing Your Tax Return
Once all documents are uploaded to your portal we will begin preparing your tax return.
We will establish your preferred communication method (text, phone, fax, email, US Mail, snail mail, pony express, etc.) and touch base with you when we have questions. This is the personal element of our service that we are proud of. Just a little bit of human-to-human contact can save a lot of tax dollars.
Providing You a Tax Return for Review
We will send an email when preparation is complete. The preliminary tax return draft will be placed in your client portal along with your supporting tax documents for review.
You can review the tax return from your phone, tablet, or PC. Now is the time to catch missing deductions. We strongly encourage you to contact us if any part of your tax return does not make sense or you feel may be in error. Your understanding is our gain; we are happy to take the time.
Signing the Authorization & Collecting Payment null
When you are happy with the preliminary tax return(s) and ready to push the “go” button, shoot us an email or text, or call us.
We will send an email requesting you sign appropriate E-file authorizations and include a payment link to pay for preparation. Payment of preparation fees is your final consent to file tax returns.
Filing your tax return(s)
Once we have received your signed E-file authorizations and payment, we will file your tax returns and provide you proof of taxing agency acceptance and a final tax return copy in print, digital, or both at your request. On a side note, we will retain a complete digital copy of your tax records for seven years and provide you a copy on request at no-charge during the seven year period.
The secure digital aspect of our service, combined with real human service via your preferred communication channel (phone, text, fax, email, Pony Express, etc.), means you can meet your tax filing obligations wherever you are in the world. Throw your tax docs in your overnight bag and we will make every effort to have your tax return completed and filed by the end of your next trip.