The Growth Advisor Podcast North Shore Accounting

Today we are talking with Pawel Wilczynski, who is a cybersecurity manager at Baker Newman Noyes.
Clients turn to Pawel for help conducting cyber assessments, readiness assessments for major frameworks and things cyber.
He works with a variety of clients – both public and private – with a particular focus on financial and insurance institutions and the technology industry. His clients include financial institution services bureaus, regional banks, and software-as-a-service providers.
According to the Verizon data breach investigations report, 82% of all cyberattacks have a human element, and so we talk about the best practices in cybersecurity hygiene-the foundational concepts which will help keep you safe, regardless of level of technology you employ.
We also touch upon a very important subject of vendor risk management because vendor networks is another vulnerability that cyber criminals love to exploit.
Finally, we talk about a variety of services IT and cybersecurity professionals like Pawel can perform in order to mitigate the risk of cyber-attacks.
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Today we are speaking with Amber Gray-Fenner about tax myths!
Amber is the owner of Tax Therapy, LLC in Albuquerque, New Mexico. She inherited her tax practice in 2010 and considers herself a tax “general practitioner.” Amber is an Enrolled Agent and a non-attorney member of the bar of the U.S. Tax Court. In 2019 Amber completed the 72 hours of specialized training necessary to become a Fellow of the National Tax Practice Institute.
Amber has been a member of the EA Journal editorial board and is a contributing tax writer for Forbes.com and ThinkOutsideTheTaxBox.com. In 2020 and 2021 Amber was selected as one of the Top 100 Must Follow Tax Twitter Accounts by Kelly Phillips Erb, “The Tax Girl.”
Amber was born and raised in Las Vegas, Nevada, and has a Bachelor of Arts in English from UNLV. When she’s not doing “the work thing” Amber knits, crochets, and makes her own yarn. She also enjoys gardening, cooking, and reading. In other words, when she’s not working in her home office, you can usually find her working at home.
Amber doesn’t do accounting!
While there is a litany of tax myths out there, we touch upon the ones that most grind our gears, amongst which are employing your kids, auto and mileage deductions, bookkeeping mistakes that may cost you at tax time, and letting the tax tail wag the dog.
Let it be known that social media in general has made the IRS’ “dirty dozen” list of scams. While one may think it’s ok to rely on Tik Tok for tax advice, we know that social media doesn’t lend itself well to tax advice, because it’s nuanced and also, the person on social media platforms bears no responsibility for what they tell you, while your trusted tax professional does!
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In this episode we have a discussion with Lisa Sigman of Lisa Sigman Law about legal issues or matters that can arise from not doing your due diligence when forming a business.
Lisa calls herself a primary care attorney for your business and has been practicing law for nearly 16 years. We met in one of the networking online groups and quickly found that not only did we have a lot in common but also had a similar client base which we serve, so since then, we have collaborated on a webinar last December (linked below) and hopefully this podcast guest appearance is also just one more thing in the long line of our joint efforts to educate business owners.
We discuss my own nightmare scenario of forming an LLC back in late 2020 which really highlighted what not to do, we also dive into what it really means to be an LLC in order to preserve legal protections it affords and go over what is and isn’t ok to DIY when it comes to legal documents.
This discussion really highlights some of the legal concepts and issues that most new business owners don’t think about or know about, but which are absolutely vital.
Legal and Tax Implications for Small Businesses Webinar
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In this episode we are talking with Morgan Anderson, Enrolled Agent and the NTPI (National Tax Practice Institute) Fellow and CEO of Golden Lion Tax Solutions, which specializes in tax debt resolution, who is a 20 plus veteran working in the tax resolution industry.
We discuss always being prepared for a potential audit in your business, as well as best practices if you do get audited, and safeguards you can implement throughout the life of your business.
How do you prepare for something may or may not occur and what can you do in your business?
Being organized, keeping your records and taking responsibility for everything that goes on in your business is a central point of our conversation.
We also discuss partnering with professionals you can and should turn to, in case an audit happens.
Best advice is-don’t panic!
Morgan really breaks it down and takes the mystery and fear out of this often unpleasant topic.
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Today’s episode focuses on the concept of reasonable compensation for S-Corp and C-Corp business owners.
Reasonable compensation is often misunderstood, but it is crucial for tax planning and compliance.
The episode highlights the importance of understanding reasonable compensation and provides insights into how to determine it accurately.
Determining Reasonable Compensation:
The cost approach or “many hats” approach is commonly used.
This approach involves evaluating all tasks performed by the shareholder employee based on a 40-hour workweek or 2,080 hours per year.
Labor statistics for the geographic area are considered to determine compensation for each task.
The total compensation is the sum of various activities performed in the business.
Relationship Between Reasonable Compensation and Distributions:
For S-Corp owners, a reasonable salary must be paid, but additional distributions can be taken if there is sufficient basis or equity in the business.
Distributions taken without paying a reasonable salary can be reclassified as payroll, leading to penalties, interest, and payroll taxes.
Keeping the salary too high or too low can have implications, including potential IRS scrutiny.
Retirement and Social Security Considerations:
Paying oneself a reasonable salary affects social security benefits and retirement planning.
Minimizing profits by paying a very low salary can result in reduced social security benefits in the future.
Reasonable compensation serves as retirement and social security funds, ensuring a secure financial future.
Actions to Ensure Reasonable Compensation Compliance:

Seek professional help to conduct a reasonable compensation study if unsure about the adequacy of compensation.
If discrepancies are identified, distributions can be recategorized as reasonable compensation to align with IRS requirements.
It is recommended to maintain accurate payroll records and consult payroll services to ensure compliance.
Regularly review and reconcile reasonable compensation based on changing business dynamics, labor market rates, and job roles.

If you require assistance with determining reasonable compensation for your S Corp, we offer reasonable compensation studies.
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In today’s episode, I’ll be discussing the optimization of payment collections and how it can significantly impact your business’s cash flow.
As a business owner myself, I understand the importance of timely payments and minimizing outstanding balances. In the two years of running my own business, I’ve faced challenges in this area and made operational changes to ensure smooth payment collection and improved cash flow.
Main Discussion Points:
The twofold goal for collections: Optimizing collections and minimizing outstanding balances.
Background and Credit History Checks:
I recommend conducting background checks and credit history checks on clients to ensure you’re working with reliable individuals or businesses.
Don’t worry about feeling embarrassed or unsure about the process. It can be as simple as doing basic due diligence by checking their online presence, such as a website or active social media profiles.
I suggest utilizing reputable and reasonably priced resources like Sterling and ClearStar for conducting background checks on employees, contractors, and business partners.
Making Payment Easy for Clients:
It’s crucial to make the payment process accessible and timely for your clients.
While I understand concerns about payment processing charges, receiving payments through checks is inefficient in today’s environment.
Subscription services or businesses selling software as a service can benefit from using third-party payment processors like Square, Stripe, or PayPal to streamline billing systems and improve payment collection speed.
For regular payments or long-standing relationships, setting up automatic withdrawals with clients can minimize processing fees and ensure seamless transactions through bank ACH payments.
Minimizing Outstanding Balances:
Even with upfront payments and automated processes, outstanding balances are inevitable. To manage them effectively:
Clearly state the terms and consequences of late payments in your contracts and invoices.
You can charge interest on outstanding balances, but ensure it aligns with acceptable industry practices and clearly communicates it in your contract.
Utilize the automation features provided by billing software to send timely reminders and follow-ups. Customize the frequency based on your payment terms and preferences.
Establish a systematic process for follow-ups, such as sending reminders three days after the payment is due, followed by emails and phone calls if necessary.
Optimizing payment collections is crucial for business success and maintaining a healthy cash flow.
By vetting clients, providing convenient payment options, and automating follow-up procedures, you can improve your chances of receiving timely payments and reducing outstanding balances.