3 Secrets of Tax Planning for Marketing and Digital Agencies

3 Secrets of Tax Planning for Marketing and Digital Agencies

Published on November 03, 2020

Last week at a socially-distanced birthday party I met Matt, who turned out to be the owner of a small digital agency in NJ. When Matt found out that I own a CPA firm specializing in tax planning and CFO services for advertising and digital agencies, he started bombarding me with questions. I gave Matt my cell number and asked him to call me Monday to talk business.

Monday afternoon Matt gave me a call…

Matt: Full disclosure, I already have a CPA and I am not looking to switch. My CPA is great, I have been working with him for many years and he always finds me deductions during tax season. I write off my car, my meals, my travel expenses….

Secret #1: Just because you already have an accountant (even if they’re a CPA), it’s not guaranteed you’re covered

Actually, when I started working with Brandon and Chrissy, they already had a CPA, who prepared their tax returns and provided them with estimated tax vouchers once a year. Through tax planning, we were able to save them $22,852/year in taxes. They have been in business for 6 years and if they have done tax planning in year 1, they could have already saved $137,112 in taxes! Imagine that! They could have purchased a house by now with the money they paid to the IRS!

Most small business owners don’t realize that most accountants just prepare returns. They don’t PLAN. Telling you to expedite expenses before year-end and hold off on billing is not planning.

Think of it like a general doctor. Yes, they’re an MD. But can they do a spinal surgery? No, for that you need a specialist.

For tax planning purposes, you need someone that specializes in tax reduction. Not tax preparation.

Click here to find out how much you have overpaid in taxes in prior years.

Me: What do you do for year-end tax planning?

Matt: I do not need any tax planning. I only make about $125,000/year.

Secret #2: You don’t have to be a millionaire to benefit from tax planning

In fact, I did tax planning for one of my current clients when he had $0 in sales. He was planning for the future. He knew that next year he was going to hit at least $500,000 in sales and needed to have a tax plan not to get hit with a huge tax bill. We were able to save him $26,347/year in taxes. Next year, he actually hit $700K in sales and saved more than what we originally projected!

Click here to start planning for next year

Matt: So, you are saying that I might have over-paid tens of thousands of dollars in taxes??? I am feeling sick in my stomach! That money is now lost and forgotten!

Secret #3: You can save money from previous years

That’s correct! Not in every case but in select circumstances it is actually possible to retrieve tax money you have already sent to the government. This means you can actually receive a check from the government for the tax you overpaid in prior years. Actually, another current client of mine came to me after his 2018 tax return was already filed, I reviewed it and after finding a mistake and amending the return, he received $35,769 from NYC. 

Do you know that there are many more secrets to tax planning? If you are interested to hear more, use this link to schedule a call with us.