Business & Tax Law Advisor

Business & Tax Law Advisor Legal & tax strategy for professionals & nonprofits | M&A deals | Legal structuring | Tax planning

Do you actually know what your business is worth?And if you did… would it change how you operate?Would you double down o...
03/26/2026

Do you actually know what your business is worth?

And if you did… would it change how you operate?

Would you double down on growth?

Would you start building a business that runs without you?

Would you begin treating it like an asset instead of just income?

Or would you keep maximizing short-term profits at the expense of long-term value?

Here’s why I’m asking:

My business partner and our CFO, Mike McDonald, CPA, MBA, is offering to walk business owners through a basic valuation using our BizEquity tool, and to help them understand the results.

We’re opening this up to anyone in my network — whether it’s for your own business or your clients.

It takes about 30 minutes.

No cost. No obligation. We’ll cover it.

If it leads to a conversation, great. If not, you’ll still walk away with a clearer picture of what you’ve built.

Comment “value” and I’ll send you the details to get started. Feel free to share this offer with your clients or anyone in your network.

Let’s see if we can make Mike regret offering this 😄

🚨 S-Corp Alert: The 2026 Deadline is MONDAY to both:(a) file an S Corp election for the current year, and (b) file Form ...
03/14/2026

🚨 S-Corp Alert: The 2026 Deadline is MONDAY to both:

(a) file an S Corp election for the current year, and

(b) file Form 1120-S or an extension for the prior year

Pro-tip: You can fax your S Corp election using the fax number in the Form 2553 instructions —just make sure you save that confirmation page like it’s gold.

Can you file late?

Yes. Under IRS Revenue Procedure 2013-30, you can often request late election relief for up to 3 years and 75 days. But "can" doesn't always mean "should."

In my experience, a late S-Corp election only makes sense if you’ve already been acting like one. Before you try to backdate your status, ask yourself:

✅ Payroll: Did you run a W-2 and pay yourself "reasonable compensation"?

✅ Tax Filings: Have you been filing payroll tax returns (Form 941 + state registrations & filings)?

✅ The Books: Do your internal records reflect S-Corp treatment from day one?

✅ Tax Returns: Did you file Form 1120-S for the years you’re claiming to have been an S-Corp?

Why the "Retroactive Trap" is Dangerous

If you elect S-Corp status retroactively without the operations to match, you’re inviting a nightmare:

- Reasonable Comp Issues: If you didn't run payroll, the IRS can reclassify your distributions as wages, hitting you with back taxes and penalties.

- Late Filing Penalties: S-Corp returns (1120-S) have steep penalties for late filing, which multiply quickly if you have multiple owners.

- The "Reasonable Cause" Hurdle: To file late, you must provide a written statement explaining why you missed the deadline. "I forgot" rarely works as well as "I relied on professional advice that wasn't followed."

Bottom line: By the time you pay for the accounting cleanup and penalties, you might spend more than you would have saved in taxes.

Sometimes the better move is simply to elect S-Corp status prospectively starting next year, rather than trying to recreate history.

03/13/2026

What's the worst tax advice you've ever heard?

Here are some doozies I've seen in my 19 years as a CPA / tax lawyer:

1. Slap your logo on it and write it off.

FAAAALSE. Business expenses must be ordinary and necessary to be deductible. Only the business use percentage of assets (like vehicles) is deductible.

2. Move your assets to a trust and they won't be taxable.

WROOONG. Depending on the type of trust, either the grantor or the trust itself will generally be taxed on the trust's income.

3. Pay your kids and you won't pay any tax.

MEHHHH. There's a specific way to do this, and it often involves additional legal and accounting costs, so proceed with caution under the care of a qualified tax professional.

4. Setting up an LLC will reduce my taxes.

NAHHHH. Setting up an LLC may provide legal protection, but on its own won't reduce your taxes. Accurate bookkeeping and tax planning will.

5. I don't have to report cash or gift cards received.

NOOOOPE. All income is reportable, no matter if it's cash, credit cards, or gift cards. If the IRS audits you and sees cash deposits, they will assume it's taxable unless you can prove that it's not.

As a lawyer & CPA, I've worked with hundreds of startups and I see the same issues and worries over and over. I put toge...
03/12/2026

As a lawyer & CPA, I've worked with hundreds of startups and I see the same issues and worries over and over.

I put together a business startup checklist to give new business owners confidence that they are focusing on the right things.

Comment "startup" below and share this post, and I'll send it over!

03/11/2026

You’re ready to start your business… so where do you start? 5 steps:

1. Create a business plan. Make sure you have a plan to generate consistent, predictable revenue.

2. Determine whether you need start-up funding, and where that will come from.

3. Meet with an attorney to consult on entity structure and licensing and get your contracts in place. Preferably someone who understands tax implications as well.

4. Meet with an accountant to set up bookkeeping and payroll, as well as tax planning and tax prep.

5.  Set up operations. Banking, insurance, IT, lease, branding, marketing, point of sale, fixed assets, supplies, staff, etc.

Thinking about selling your business? Here's the team you'll need. Contact me for referrals!1. Business broker. Decide w...
03/10/2026

Thinking about selling your business? Here's the team you'll need. Contact me for referrals!

1. Business broker. Decide whether you need help selling or whether you'll do it on your own. A good broker will:

(a) help find the skeletons in your close and advise you on how to fix them before listing, or at least how to tell a story around them,

(b) bring qualified leads (not just post it on their website) and

(c) increase your value significantly more than their cost.

2. Business appraiser / CFO. If your broker can't advise you as to value, get a basic business valuation to understand (a) the range of value as your business stands currently, and (b) which factors will affect your valuation. A buyer isn't going to care what your appraiser came up with, so this is mostly for your own understanding. If you have a bigger deal, the buyer will generally produce a "quality of earnings" report. To understand this and make sure it's correct, you should work with a solid CFO-type who understands your business model.

3. Business attorney who regularly does M&A deals. Look for someone who specializes in transactional law, not someone who does everything and can "figure it out."

4. Tax accountant that is familiar with different deal structures & understands both the accounting & tax implications. e.g., asset vs stock sale. Make sure this accountant is adept at tax planning so you don't end up giving half of your income to the government!

5. Financial advisor who works with business owners. The one who just plops your money into a generic target retirement account is not going to cut it here. You need someone who understands how business transactions work and is open to diversifying your investments into other business opportunities, real estate, etc., and not just the markets.

I recommend an LLC upon beginning operations in most cases, but for liability purposes, not tax purposes. If you’re sign...
03/09/2026

I recommend an LLC upon beginning operations in most cases, but for liability purposes, not tax purposes.

If you’re signing contracts and operating under your own name, all of your assets are exposed. It’s important to establish the separation early because you never know which contract will take off and when an accident may happen.

There’s a breakeven point on an S Corp… you have to save more in payroll taxes than the extra costs inherent to an S Corp, e.g.: S Corp election, business tax return, payroll administration and reporting, reasonable compensation study, etc.

Let’s assume an additional $5k in tax and accounting costs. If you elect S Corp status with $100k net profit and calculate $60k as reasonable compensation, you’ll save about $6k in payroll taxes (40k x 15.3%), so it’s technically worth all the hassle.

$100k is generally the threshold I recommend starting to look at an S Corp, but it needs to be sustained year over year or it won’t be worth the extra cost.

My 10 year-old: “Dad, I’m gonna be your client. How do you save money on taxes?”Me: “Buy stuff.”Her: “What?! That’s how ...
03/08/2026

My 10 year-old: “Dad, I’m gonna be your client. How do you save money on taxes?”

Me: “Buy stuff.”

Her: “What?! That’s how you lose money!”

Some people just get it!

We're pumped to have Mike McDonald as a partner and CFO! Mike helps business owners stay organized and forward-thinking ...
04/18/2025

We're pumped to have Mike McDonald as a partner and CFO! Mike helps business owners stay organized and forward-thinking as a Fractional CFO

Address

Mesa, AZ
85206

Opening Hours

Monday 9am - 5pm
Tuesday 9am - 5pm
Wednesday 9am - 5pm
Thursday 9am - 5pm

Website

Alerts

Be the first to know and let us send you an email when Business & Tax Law Advisor posts news and promotions. Your email address will not be used for any other purpose, and you can unsubscribe at any time.

Shortcuts

Share

Category