In this issue:
  • Tax Corner: ERCs
  • Tax Scrambler
  • Client FAQs: Exit Planning with Greg Maddox
  • Check This Out
  • Welcome New Clients!
  • Important Tax Dates
Love is in the air…Tax love, that is!
February is the month of love, but very few people actually love doing their taxes. Thankfully, we do!
February and March are when tax season truly starts to heat up. All 1099s have been issued, 2021 books have been updated and closed out, and now it’s time to figure out our clients’ tax liability. Since we’ve been keeping up with revenue and expenses throughout the year, there shouldn’t be any big surprises when you see your tax bill! That’s part of our core mission here at CPA.
If you haven’t already done so, now is the time to access your Tax Organizer via the client portal and upload any necessary forms and documents. Please note that all attachments need to be sent through the portal and not through email because of security and visibility concerns.
This is a busy time of year, but we are never too busy to answer your questions. If you need something, please send us an email or give us a call. We are here to help.
Susan Clarke & The CPA Team
Tax Corner:
ERCs (Employee Retention Credits)
Employee Retention Credits (ERCs) were established by the government to help businesses offset the cost of keeping staff employed during the COVID-19 pandemic, prior to September 30, 2021.
Eligible businesses that experienced a decline in gross receipts or were closed due to government order and didn’t claim the credit when they filed their original 2020 or 2021 return can still take advantage of the credits by filing an amended 941, Quarterly Federal Tax Return.
To claim the credit for 2Q2020 thru 3Q2021 generally, a business needs to file a 941X and has up to 3 years from the date the return was filed or due.
And yes! You may claim ERCs even if you received a PPP loan.
Besides a decline in revenue and closure, a business may also qualify if they experienced significant supply chain slow-downs or shut-downs. These cases require an extra level of due diligence to determine if the business qualifies.
If you have questions about ERCs and your ability to claim them, send us a message!
CPA Client FAQs
Q: I want to sell my business. What do I do?
Every so often, one of our clients will reach out and ask us about the potential for selling their business and how to go about it. Since most SBOs don’t make a habit of buying and selling businesses, it’s natural to have questions. Is your business sellable? How much is it worth? How is the value calculated/estimated? How do you find a buyer?
There are steps you can take early on in the process to position yourself and your business to the best advantage. This advanced work is called “exit planning” and it can help you maximize the value you can achieve when you do sell your business.
While we can help you figure out the tax implications and bookkeeping related to the sale of your business, we encourage our clients to seek out a professional to help them with their exit planning.
We asked Greg Maddox, a Senior Business Advisor with Cultivate Advisors, to share his insights into this topic. He specializes in exit and succession planning and is the creator of The ExitLifestyle™ Accelerator. He follows a unique and proven process that has helped over 700 business owners successfully scale, sell or passively own their businesses on their terms and timelines.
If you’re one of the 30% of businesses that survive past their first decade, you no doubt want to get something back from your years of hard work and sacrifice. But the truth is that for most businesses, when it comes time for the owner to leave, they simply shut down.
Even when owners build a business that is primed for selling, more than 1 in 4 go through a lengthy sales process only to find that the deal falls apart before closing. (source)
The stats are clearly not in your favor as a founder looking to exit, but can you do something to change the game to your benefit? The answer is YES, if you understand the root cause of these unfavorable results with enough lead time to do something about it.
Simply stated, the 2 big reasons most exits fail are:
1. The business isn’t ready
2. The owner isn’t ready
Most of us intuitively understand what business readiness means. However many overlook the impact of owner readiness. So let’s quickly explore both.

Signs that a business isn’t ready:
  • Lack of well documented and transparent financial reporting
  • No clearly documented growth strategy
  • Over concentration of revenue from a few key customers
  • Business model that is constantly short on cash
  • Lack of predictable or recurring revenue
  • Lack of a truly differentiated product or service that stands out in the market
  • Can’t quantify customer satisfaction
  • Over-dependence on owner involvement
Signs that an owner isn’t ready:
  • No clear vision of what they want their next chapter to look like
  • Lack of flexibility on potential exit options and deal structures
  • Life and identity consumed by business
  • Lack of financial readiness – all eggs in the business basket
Exiting a business on your terms and timeline is hard, even if your company is sellable. In the best of circumstances, there are several things that could make your exit fall apart before you get your big payday:
  • Valuation gap in pricing
  • Unreasonable buyer or seller demand
  • No market for your business
  • Seller misrepresentation
  • Lack of capital to finance your business
  • Economic uncertainty
The good news is that most of these issues can be fixed with enough lead time.
At the end of the day, exit planning isn’t about getting you and your money out of the business at some point in the future. It is about getting what you want out of your business starting today.
If you begin with the end in mind, you can create your Ultimate ExitLifestyle™ – even if you never sell. And by taking the actions necessary today to address the problems outlined above, you’ll end up creating a level of business freedom, financial freedom, and personal freedom years ahead of schedule that will only enhance a future exit.
If you would like an overview of Greg’s exit planning process, email Greg@CultivateAdvisors.com and he’ll send you a pdf explaining the process.
Discover your level of exit readiness with Greg’s free online scorecard here.

Interesting Reads & Useful Tools
  • Airbase is an Employee Expense Reimbursement system that integrates with QBO. Check it out here.
Say Hello to CPA’s Newest Clients
  • Canary Lane – Based in Illinois – Canary Lane is a collection of beautiful, handmade, ethically-sourced textiles from across the globe. Your space should be a reflection of your personality, so Canary Lane travels the world to find one-of-a-kind textiles for you and your home. 
  • Isthmus Instruments – Madison, WI – Specializing in hand-crafted, stunning handpans. A handpan is a musical instrument crafted from two bowl-shaped steel sheets, hammered and fused together to create a resonant sound chamber. Isthmus Instruments creates handpans with character, having notes that are soft to the touch and that resonate freely with the lightest touch.
Important Tax Dates & Deadlines
March 15, 2022
Partnership and S Corporation Returns for Calendar Year 2021 Due
**April 18, 2022**
Last Day to File Individual Tax Returns
Last Day for Individuals to Make 2021 IRA Contributions
Last Day to File C Corporation Tax Returns for Calendar Year 2021
1st quarter 2022 Estimated Tax Payment Due
H.S.A. Funding Deadline for 2021
May 16, 2022
Not-for-profit Returns for Calendar Year 2021 Due
June 15, 2022
2nd quarter 2022 Estimated Tax Payment Due
September 15, 2022
3rd quarter 2022 Estimated Tax Payment Due

Clarke Public Accounting | Website