Two Obstacles Keeping Business Owners from Saving Thousands in Taxes

Todd Mardis founded Capital Preservation Services in 2004 and has since grown the tax consulting firm from just one location in Mississippi to include others in Indiana, Alabama, and Wisconsin. Recently, Todd Mardis was featured on the Wealth Without Wall Street podcast where he talked about some reasons business owners fail to use tax planning strategies.

Most business owners know someone who makes substantially more money than they do but pays much less in taxes. That’s because they are not applying legal tax-saving strategies to reduce their tax burdens.

One thing that keeps some business owners from applying these strategies is the fear of audits. They think that planning their taxes to reduce their liability will open them up to an IRS audit. Many business owners know they are not good at keeping precise documentation, so they think they will fall into trouble with the tax authorities. However, good tax planning actually incorporates audit defense. In this way, it’s possible to save on taxes and be even better prepared in the case of an audit.

For other business owners, what holds them back is their over reliance on CPAs. While CPAs act in the best interests of their clients, when it comes to taxes, they often take a defensive approach rather than a proactive one. CPAs tend to work with the numbers they are given, entering them in tax returns while assuming business owners have done everything they can to reduce their taxes. However, many business owners are not taking advantage of tax incentives they are eligible for, so when they rely on CPAs who take a defensive approach to accounting, they miss out on thousands in tax savings.

This, however, does not mean that business owners should cut the relationships with their CPAs. They can work with CPAs and tax strategists together. Both can support each other for the client’s ultimate benefit.