I am wondering if you have had experience with startup practice consultants and if they are worth it.
Thanks a bunch!!
I can’t answer your question specifically; however I can tell you we picked up a client in December who started from scratch in April 2010 and used a start-up company that professed to handle everything. I can’t comment on how they did on the location search, design, forecasting, etc., however, I can tell you they completely blew it on their entity selectionincome tax advice.
Because of their BAD advice this poor doctor will have to come out-of-pocket $15k in taxes on April 15th of this year instead of benefiting from a tax loss that would have allowed them to NOT owe anything in April. Cash is VERY tight for them and this is going to be VERY painful them. We’re actually going to take some steps to alleviate the pain down to maybe $8k-$9k after the fact; still, it’s not a pretty picture.
Make sure you consult with YOUR CPA when it comes to entity selection and income tax issues.
Tim, Thanks for your reply.
Regarding business entity -is there anything better than going forming a PLLC and doing the s-election?
It depends on the situation.
Did they make him a corporation? What went wrong?
They created the LLC then elected S-Corp status, and were suggested that the doctor take a salary too! Total loss was at least $50,000 which was created in part by the $30,000 in W-2 the doctor took. So not only could the doctor NOT use the loss to help offset the $30,000 that they took to help create the loss, they paid payroll taxes on the $30,000 as well….just plain dumb. Had the consultant suggested keeping the bank loan in the doctor’s personal name that would have been acceptable from an income tax perspective. Either way, the doctor is personally liable on the loan.