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Old 05-04-2021, 05:01 AM   #1
Kibz
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AMA before May 17 Filing | Former poker pro turned CPA

Hello all -

My names Rafe Kibrit and I too suffer from Black Friday PTSD. After deciding against relocating out of the country, I've stumbled into the world of finance and accounting. As I begin my own business after working in public accounting, my main goal is to educate my clients about not only their business, but their personal finance. I believe the lack of curriculum dedicated to gaining financial literacy through formal education is one of the main reasons many educated individuals struggle when dealing with how to invest, understanding basic taxes, time value of money, etc.

As I begin my journey in spreading financial knowledge, I'd love to give back to the poker community. While not active on the forum - I definitely can credit a lot of the (previous) poker skills to twoplustwo hand breakdowns.

With that said - ask anything poker regarding either your 2021 taxes (due May 17!) or poker related taxes in general.

And if you'd like to discuss your personal situation further - feel free to PM me!
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Old 05-04-2021, 09:13 AM   #2
Kibz
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Re: AMA before May 17 Filing | Former poker pro turned CPA

Given this has been moved to the Finance, Business & Investing thread - feel free to ask any non-poker related questions. I've only received PM's thus far so if you prefer that way - shoot me a message!
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Old 05-04-2021, 10:24 AM   #3
snowie963
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Re: AMA before May 17 Filing | Former poker pro turned CPA

So if I Have a small business where my wife and I are a partnership and each make about 100k, we save about Half of our incomes and invest some. I don't really need to expand the business very fast so I am not buying new vehicles or machinery every year or anything.

I got my taxes back from my accountant this year but didn't opt to do a meeting because of the covid stuff but I had wanted to ask him on what he thinks about when to consider incorporating the business. We are in Canada but I assume it is similar tax laws, or maybe its not something you can shed insight on. A problem I may have is I own 3 trucks and an excavator (4 years and $30,000 left) in my personal name, 1 is paid off, 1 bought new has $6000 payments left and another new one has 5 years or $45,000 of payments left.

We are a service based business with 2-3 full time employees and probably 750k gross this year, 400k gross profit.
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Old 05-04-2021, 01:30 PM   #4
Kibz
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Re: AMA before May 17 Filing | Former poker pro turned CPA

Hey - thanks for reaching out!

Let me preface this by saying I'm not familiar with the Canadian tax laws.

How long have you been in business? Generally, its more advantageous to generate a separate, distinct entity rather than file as a sole proprietor. After doing a quick google search, it does not seem as though an LLC is available in Canada, which is a cost-effective way to limit your liability in the US. Your accountant should be able to better inform you of your options in Canada.

The key point to note here is that you don't want possible creditors or others attempting to access your personal funds if your company doesn't meet its obligations. As mentioned above, not only should you create a separate entity for your business, you should also not co-mingle funds between personal and business accounts. Not only will this make bookkeeping easier, it should also help your tax-bill at the end of the year. The last thing you want is to send messy books to your accountant who most likely charges you by the hour. I've worked with clients at a previous CPA firm who ended up paying probably 50% of their fees for the accountant to reconcile your bank accounts & 50% of less on value added service. (Also, based on prior US tax law, separate & distinct entities that have co-mingled funds with personal funds have been deemed personally liable and is known as "piercing the corporate veil".

Without even knowing much about your company, I would recommend discussing with your accountant soon regarding incorporating given your revenue is approaching $1M. Are all the vehicles mentioned used for business purposes? If so - when you create your entity, discuss with your accountant about transferring the property/assets, in addition to cash, as capital contributed upon formation. When discussing options with your accountant, ask about forming a tax-efficient retirement plan that fits you (and possibly, employees) and your wife's goals. In addition, ask questions regarding other proactive strategies to save money on taxes.

Assuming the US and Canada are mostly similar - I hope this provides a bit of help. Also - kudos on your profit margin!


Quote:
Originally Posted by snowie963 View Post
So if I Have a small business where my wife and I are a partnership and each make about 100k, we save about Half of our incomes and invest some. I don't really need to expand the business very fast so I am not buying new vehicles or machinery every year or anything.

I got my taxes back from my accountant this year but didn't opt to do a meeting because of the covid stuff but I had wanted to ask him on what he thinks about when to consider incorporating the business. We are in Canada but I assume it is similar tax laws, or maybe its not something you can shed insight on. A problem I may have is I own 3 trucks and an excavator (4 years and $30,000 left) in my personal name, 1 is paid off, 1 bought new has $6000 payments left and another new one has 5 years or $45,000 of payments left.

We are a service based business with 2-3 full time employees and probably 750k gross this year, 400k gross profit.
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Old 05-06-2021, 03:31 PM   #5
King Spew
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Re: AMA before May 17 Filing | Former poker pro turned CPA

Best way to transfer ownership of a private company to (some of the) employees?

Biz in NC. I own 100% stock. Sub S.... after many years as a C corp. Valuation probably under one mill. No real estate, only a million in mill machinery that at a minimum is 20 years old.... so, not worth a mill. Still operating with a 100K profit per year -ish.

Want to give two employees the business (hehehehe, sounds bad). One is a relative, one has been long time shop foreman. (I will continue owning the property that is held in a different LLC). Biz may not survive after both retire in 10 years.

Best way to xfer with the least amount of tax for giftees? Timeframe is.... done within next 7-10 years
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