I hate to ask for professional help like this but I am between a rock and a hard place.

I own a produce distribution co. and found out Tuesday that my largest customer (the customer that makes it all happen and pays all the bills) is going to change their operation in such a way that will exclude us! They will stop doing business with us as of 1/9/04.

I have looked at the numbers and there is no way we can even come close to surviving without them. This means that we will have to shut the doors...

My problem is this--> my CPA is on vacation and I am looking for some answers to some simple questions about the financial side of shutting down operations. I need this info so that I can plan my personal as well as professional future. He'll be back next week and I'll consult with him then but I am looking for some information now so I can start easing my mind!

Can anyone help?

Here are my questions-

1. We have been paying quarterly taxes this year based on earnings last year. This money has come directly out of Retained Earnings (we are an S-corp in AZ). If we show a weak profit level this year will we get a percentage of the projected taxes back? We netted about $135,000. This year I think we will net about $

2. Should I take as much as I can out of this years net as s-corp distributions?

3. Are there other ways that I can drive the profit level down for 2003 in such a way that I personally benefit from it after the company is shut down? Such as paying off my truck...things like that. This way I would both not pay taxes on any profit as well as get all of the first three quarters of projected tax payments back.

Any help would be appreciated!

Thanks,

JK

 

One Certified Pain in the Arss!
Sorry, couldnt resist this one!

Stryder

 

What is the difference between the corporate tax rate you pay on profit from the business and the tax rate you pay on personal income? Also, if you receive tax rebates for overpayment, will that be considered as taxable income?

 

As an S-Corp the rates are the same. I, as the sole shareholder, receive all of the profit. I pay the taxes at pretty much the same rate in any case.

The payments we have been making this year (for the potential net profit this year) has come out of retained earning from last year. Those retained earnings (the post-tax net from last year) cannot be considered as income since I have already paid taxes on them.

JK